LONDON Reuters - Demand for digital assets is set to grow as online virtual worlds become more popular but investors face some short-term risks, Animoca Brands chairman and co-founder Yat Siu told a panel on Wednesday.
In a virtual world environment, users can buy virtual land and other digital assets such as clothing for avatars in the form of a non-fungible token NFT NFTs, which has exploded in popularity in 2021, with enthusiasts speculating about rising prices. An NFT representing a plot of land in a virtual world sold for $2.4 million last week.
Asked whether the rapid growth of NFTs and the metaverse represents 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, a portion of revenue is generated by transactions made within the games.
In a panel on 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, like 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, because they're fine with a long-term view on the metaverse's utility.
In the third quarter, sales volumes of NFT hit $10.7 billion, up more than eightfold from the previous quarter.