Short-term risks facing investors: Animoca Brands

LONDON: Demand for digital assets is going to grow as online virtual worlds become more popular but investors are faced with some short-term risks, Animoca Brands chairman and co-founder Yat Siu told a panel on Wednesday.

Users can buy virtual land and other digital assets, such as clothing for avatars, in the form of a non-fungible NFT NFTs, which has exploded in popularity in 2021, with speculators speculating about rising prices. A NFT representing a plot of land sold for $2.4 million last week.

Asked whether the rapid growth of NFTs and the metaverse represented an asset price bubble, Animoca Brands' Siu said that there would be bumps in the road but that this is true of all finance, not just NFTs and cryptocurrencies.

The Hong Kong-based gaming company Animoca Brands invests in and builds various virtual worlds, including Axie Infinity and The Sandbox, which get a cut of revenue from transactions made within the games.

In a panel about the metaverse at the Reuters Next conference, Siu said that the growth of the metaverse is a little bit like the growth of China 30 years ago.

Maybe people didn't understand it but you could see the growth factors that make China work, such as population growth, industry growth, and all that kind of stuff. The metaverse is the equivalent. He said that investors need to be vigilant about possible issues while they are fine with a long-term view on the metaverse's utility.

In the third quarter, sales volumes for NFT hit US $10.7 billion, up more than eightfold from the previous quarter.