The metaverse, the idea of an immersive version of the internet that combines technologies such as virtual reality and NFTs, has become one of the hottest topics in the crypto and blockchain industry in recent months. Citibank just released a report that estimates the total addressable market between $ 8-13 trillion by 2030.
However, direct opportunities for forward-looking investors to get exposure to this growing industry have been limited.
Now, one of the oldest exchange-traded product (ETP) providers in crypto is looking to fill that gap. 21Shares, a Switzerland-based ETP issuer led by Forbes 30 Under 30 alums Ophelia Snyder and Hany Rashwan, is launching the firm’s 30th product, a single-asset ETP based on SAND, the native token of the metaverse project The Sandbox.
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The Sandbox is a virtual world akin to a blockchain-based Second Life where users can interact with companies and each other. It has been signing up partners in rapid succession, such as Adidas, the Care Bears, and Snoop Dogg.
Revealed exclusively to Forbes, Snyder says that this offering comes in response to growing customer demand for opportunities to expand beyond the more mainstream and larger assets such as Bitcoin and Ethereum, as well her belief that the industry has reached a key tipping point in its development.
“The conversation has really shifted away from, Is bitcoin going to exist in three years ?, To what will the crypto ecosystem look like in three years? And that means that the types of discussions we’re having with institutional clients are much more sophisticated… and metaverse is one of those things where you’re starting to see real themes emerge in crypto, ”says Snyder.
SAND is the best performer among the blue chip metaverse tokens over the last six months, providing 328% returns to investors. However, it has underperformed these competitors year to date such as Decentraland (MANA), Axie Infinity (AXS), and Enjin (ENJ) as part of a downtrend that started last December that impacted the entire industry. This drop also coincides with falling search interest for the metaverse in general, suggesting that the major hype cycle that started when Facebook rebranded as Meta back in October could be hitting a lull. However, Snyder is betting that this dip will end up being an outlier in the bigger metaverse story.
The Sandbox is not 21Shares’ first metaverse product. It launched a product focused on MANA in February, which currently has a little over $ 1 million AUM. This would put it at approximately 50x lower than the Grayscale Decentraland Trust, a closed-end fund offered by Grayscale, which is only available to accredited investors and institutions in the US and has been available since February 2021.
Conversely, 21Shares products traded freely on multiple European exchanges, but they are largely unavailable to US investors until the Securities and Exchange Commission starts approving spot crypto ETFs. To date, the regulator has only approved a handful of bitcoin futures ETFs, and 21Shares had a spot bitcoin ETF application, which it submitted alongside star investor Cathie Wood of Ark Invest, get rejected last week.
When asked about how investors should compare the two products, Snyder cited the early nature of the metaverse vertical, highlighting the importance of offering diversification opportunities to investors. She also noted that this is likely not the end of 21Shares’ product releases related to the metaverse.