Virtual land is booming; you need to understand this wave of Metaverse land investment.

Introduction: Starting from a piece of 'land'

Before you even realize it, JPMorgan Chase, HSBC, and Samsung have already purchased land in the metaverse. You might ask: buying land in an invisible, untouchable virtual world, isn't that a scam?

Actually, it’s not. Metaverse real estate has become a real business, and the market size is astonishingly large. According to the latest data, the average land price on major metaverse platforms has skyrocketed from $1,265 in January 2021 to $12,684 in February 2022—an increase of 10 times in just 13 months. That's not even the craziest part: the funds flowing into the metaverse sector in 2022 exceeded $120 billion, more than double the $57 billion in 2021.

What is metaverse land? Simply put, it is an NFT

To understand metaverse real estate, one must first break down a concept: a piece of metaverse land is essentially an NFT.

What is special about NFTs? They are unique digital assets, each one different from the other. This characteristic allows them to provide digital proof of virtual land ownership for holders, similar to property deeds. Compared to purely artistic NFTs, metaverse real estate is easier to understand because it has tangible functionality: you can build on this land, hold events, advertise, and create social experiences.

Unlike traditional real estate, although metaverse land is invisible and intangible, through blockchain technology, your ownership of it is easier to verify and trade than physical properties. Buying and selling only require placing an order in the market, and transferring only requires an on-chain transaction.

Why are big companies racing to buy land? Three core reasons

So why are financial giants like JPMorgan and HSBC making the effort to enter the market? There are three reasons:

The first is functionality. You can do a lot of things on the metaverse land. JPMorgan Chase bought land in Decentraland to invite virtual clients and create immersive financial experiences. HSBC purchased land in The Sandbox in the first quarter of 2022 with the aim of creating a brand new interactive space. These are not purely investment actions but real business applications.

The second is collectability and brand effect. Metaverse real estate has become a high-end collectible, and holding rare plots on specific platforms is a status symbol in itself. Samsung created a virtual experience space called “Samsung 837X” in Decentraland and held the #RecycleUp fashion show, which serves as both marketing and asset accumulation. The South China Morning Post even developed a digital version of the Hong Kong Star Ferry Pier in The Sandbox, directly transporting a real-world landmark into the metaverse.

The third is speculative potential. The market's optimism about the future of the metaverse implies that the land held may appreciate in value. A piece of metaverse land owned by Snoop Dogg eventually sold for nearly $500,000, and early investors have already profited through buying and selling. In a bull market atmosphere, speculation is often the main force driving prices up.

What determines the price of metaverse land?

Since you are considering buying, you need to understand how the price is calculated. There are three factors that determine how much virtual real estate in the metaverse is worth:

Platform and Reputation. The price of the same piece of land in Decentraland and on a smaller platform can be vastly different, just like Nike shoes compared to those of an unknown brand. A well-known platform means more traffic, an active ecosystem, and greater future potential, making the land more valuable.

Geographical location and functionality. Plots located in popular areas with highly customizable features will be priced higher. For example, land close to virtual traffic concentration areas is suitable for advertising space, making it naturally more sought after. Some platforms allow for high levels of personalization, where you can freely plan the space and experience, making these highly functional lands also more expensive.

Market sentiment and speculative enthusiasm. When the entire market is bullish on metaverse land, speculation becomes a dominant factor in pricing. As long as everyone generally believes that “this land will appreciate in value in the future,” prices will soar.

Is it worth entering the market now? An honest perspective

The metaverse real estate market has experienced super-fast growth, but this also brings a question: excessive growth does not equal market health. We may need to wait for this crazy phase to pass before we can truly see the actual value of metaverse land.

However, some use cases have already been validated. Concerts, conferences, trade shows, art exhibitions, and brand launches have all been successfully held on virtual land. For creative workers, brands, and community operators, metaverse real estate indeed offers new possibilities.

For pure investors, there are both risks and opportunities at this stage. If you believe in the long-term prospects of the metaverse, getting in early does present an opportunity; however, if you are just following the hype, you need to be careful of taking on the role of the bag holder.

Summary: Not just speculation, but future infrastructure

Metaverse land is no longer just a pure speculative asset. With the maturation of mainstream platforms like The Sandbox and Decentraland, more and more brands and creators are treating it as a real commercial and social tool. However, for metaverse real estate to truly take root, mere speculation is far from enough; it also requires a continuous influx of practical applications and user growth.

For anyone interested in the metaverse, understanding the logic of virtual real estate has become a fundamental skill. Whether you want to invest, start a business, or simply broaden your horizons, figuring out how to engage with metaverse land will be the first step into this new world.