The First Major Bank to Enter the Metaverse Is JP Morgan

One of the most popular metaverses, Decentraland, is now home to JP Morgan’s first metaverse lounge, a blockchain-based one. To capitalize on the possible financial rewards, this is the banking giant’s first step into the metaverse.

When you enter the metaverse, you’re actually entering a digital version of yourself, which allows you to socialize, attend events, and explore.

As the name of the bank’s Onyx lounge suggests, institutions and enterprises have the opportunity to access the metaverse through the bank’s Ethereum-based services.

Metaiuku, a virtual recreation of Tokyo’s Harajuku shopping area, is home to the Onyx Lounge, where a tiger roams the first floor under the watchful eye of an image of JPMorgan Chase CEO Jamie Dimon. On the second floor, an avatar can witness a panel discussion on the cryptocurrency market.

JP Morgan Believes in the Endless Potential of Metanomics

Additionally, in conjunction with the official unveiling of the ‘Onyx Lounge,’ the financial services firm produced a white paper highlighting the “limitless” potential of the virtual environment.

The metaverse’s economics, known as metanomics, has the potential to generate $1 trillion in annual revenue, according to a new analysis from JP Morgan.

So, what are the bank’s expectations for the future? There are numerous possibilities for metaverse exploration in JP Morgan’s paper.

JP Morgan
JP Morgan

Virtual products are a multi-billion dollar industry every year, nearly as much money as is spent on music.

Messages worth an estimated $60 billion are exchanged every day on Roblox.

Create – Second Life’s GDP in 2021 is expected to be over US$650 million, with nearly US$80 million in creator compensation.

Own – The current market capitalization of NFTs is $41 billion.

200 significant relationships with The Sandbox to date, including the launch of a virtual environment, focused around music by Warner Music Group.

Owning a Virtual Home and Playing a Virtual Game

In spite of the fact that JP Morgan does not believe that the metaverse will take over all human interactions and that the risk of “being left behind is worth the incremental investment needed to get started,” it is eager, like other companies, to explore “the many exciting opportunities it presents for customers and brands alike.

According to JP Morgan, the price of a block of virtual land doubled in just six months in 2021, rising from US$6,000 in June to US$12,000 in December.

There will be decentralized autonomous organizations that can act as financial arms for these objectives in the virtual real estate market, which the bank predicts will eventually start to see services similar to those in the physical world, including credit, mortgages, and rental agreements

A third option is virtual gaming, which is a landscape with its own population (GD, in-game currency, and digital goods) that mirrors the existing global economy in many ways. Since it has a long history of expertise in cross-border payments and foreign currency trading as well as trading and safekeeping, JP Morgan sees this as a great opportunity for the bank.

Predicted Market Values by Investment Banks

However, JP Morgan is hardly the first major bank to recognize the trillion-dollar potential of virtual space, with the launch of its new lounge.

Blockchain has the potential to provide infrastructure for virtual worlds, like Grayscale, a crypto investment giant predicted in a report titled “The Metaverse, Web 3.0 Virtual Cloud Economy” published in November of last year.

Grayscale estimated that the metaverse represented a $1 trillion annual revenue market. It was only in December that CNBC’s CEO Cathie Wood stated her belief that this multi-trillion-dollar opportunity extends beyond the gaming industry and consumer goods business and into every sector of our economy, a statement that was backed up by Ark Invest’s CEO Cathie Wood.

JP Morgan
JP Morgan

Competing investing firms hold this view. There is an US$8 trillion opportunity in the metaverse, according to Goldman Sachs, whereas Morgan Stanley sees it as a future market opportunity just for China.

Bank analysts predict that the total addressable market for China’s metaverse will be around US$4 trillion, as it replaces mobile internet with a more “immersive experience,” but that the opportunity will reach US$8 trillion if the metaverse starts disrupting offline activities like test drives, real-estate showings, and education.

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There’s a good chance that additional banks and investment firms will join the metaverse this year, given the opportunity. Keep an eye on things.

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