Chris’ note: Last night, colleague Teeka Tiwari lifted the lid on his No. 1 way to play one of the year’s hottest tech trends – the metaverse. And more than 23,000 of your fellow readers showed up to hear what he had to say.

If you missed his event, catch up on it here. Then read on below for my Q&A with his analyst Nilus Mattive.

A lot of folks mistakenly believe the metaverse is about little more than kids playing video games in VR googles. So they dismiss it. But as Nilus and I discuss, it’ll ultimately spawn the world’s biggest economy. And that economy – powered by crypto – is already taking shape… 

Q&A With Nilus Mattive, Chief Analyst, The Palm Beach Letter

Chris Lowe: Hi, Nilus. For folks new to this, how would you explain the metaverse?

Nilus: It’s a 3D extension of the internet where many different trends and technologies are starting to intersect.

Take the power of the internet… plus 5G smartphones and tablets… and add in artificial intelligence (AI), virtual reality (VR), and augmented reality (AR). AR is where you blend what you see in the real world with computer-generated images and sounds.

Now, layer in all the possibilities of the blockchain – cryptocurrencies, NFTs (non-fungible tokens), decentralized organizations – and you get this new evolution of the internet that’s much richer and more immersive than the version we have today.

Chris: I’ve described the metaverse as a version of the internet you step inside. If readers have kids who play the online games Fortnite or Roblox, they’ll have a sense of it.

Instead of just calling up web pages and watching videos… you enter a virtual world where you interact with other people’s avatars – digital representations of themselves – and even be part of a whole new economy.

Nilus: This is a really big idea that’s hard to wrap your head around. You’re right – there will be entire economies in the metaverse. According to Jensen Huang, the founder and CEO of chipmaker Nvidia (NVDA), the metaverse economy will be even bigger than the economy of the physical world.

We’re still in the very early stages. Just like the internet was in the 1990s and early 2000s.

I’m sure you remember conversations you had 20 years ago trying to explain the internet to someone. “Well, there are these things called web pages. And you use these things called hyperlinks to move between them.”

It was hard to grasp because it was all so new. Nobody predicted the kind of internet we have today – with social media, video streaming, and virtual worlds.

Chris: So what does this metaverse economy look like?

Nilus: You used the game Fortnite as an example of what the metaverse is like. But it’s important for your readers to understand it’s not just about gaming. The metaverse is a varied landscape with up-and-coming art galleries, first-rate concerts, and luxury shopping.

There are even people who get paid to work by way of their avatars in a casino in a blockchain-based virtual world called Decentraland. They’re earning in a Decentraland cryptocurrency they can cash out for dollars.

There’s also a metaverse “play-to-earn” game called Axie Infinity that’s based around NFTs. Players earn cryptocurrency in the game and cash it out for local currency.

It’s been a huge hit… especially in places where local jobs markets don’t offer much. There are people in the Philippines, for instance, who are earning more money playing Axie Infinity than they would earn in a real-world job.

Big brands are also getting involved. Folks are buying $4,000 digital Gucci bags in Roblox. Shoemaker Vans set up its own store in the metaverse. And Sotheby’s has been holding metaverse art auctions. I have my own avatar to attend and bid on various NFT art.

Enthusiasts talk about a day when there will be full-time digital real estate agents and AI-driven clerks running virtual stores.

Chris: The digital real estate phenomenon is wild. Explain how that works.

Nilus: I’ll give you one example. Players can develop “land” in the Axie Infinity virtual world. Each parcel of land is represented by an NFT – a digital token authenticated on the blockchain that represents a unique plot of land in the game. Players use this land to make in-game resources and create stores. Landowners can even develop their own games and attractions and charge other people to visit them.

Land in Axie Infinity is going for big bucks. It creates a lot of new profit potential in the process. In November, a plot of land in Axie Infinity sold for $2.5 million.

Just like real estate in the real world, some locations in these virtual worlds are more valuable than others. But even the cheapest plot of land sells for more than $10,000.

Chris: It sounds to me like some form of the metaverse is already here.

Nilus: I think that’s right. It’s the early days still. But this isn’t some far-off prediction. You and I may not work in a digital casino… or earn crypto playing a metaverse game. But other people do.

Teeka and I think Huang is right. We’ll see the metaverse eventually become one of the largest economies in the world. It’ll transcend geography in a way most real-world economies can’t.

It’ll be a great equalizer in terms of spreading financial opportunities to people in places where those opportunities aren’t possible otherwise.

Chris: It’s a fascinating idea. But my sense is a lot of folks reading this are skeptical about it becoming a reality. What do you say to people who think this is something for kids with VR headsets… but it’s not a serious next step for how we interact online?

Nilus: People talk about this being a young person’s trend. But that’s missing the point. Let me illustrate what I mean with a personal experience.

My daughter is 14. She plays Roblox. As you mentioned, it’s a game that comes very close to the metaverse concept.

My mother-in-law is in her 70s. She’s started to embrace Roblox as a way of playing and interacting with her granddaughter.

She’s in Delaware. We’re across the country in California. But I’ll hear my daughter laughing and saying, “No, Grandma, don’t go that way! Go this way. No, we’ve got to go here! See that box? Jump up on that.”

It’s not like my daughter is watching a screen and her grandmother is watching another screen. It’s like they’re physically together in the same place. They’re inside this 3D world with each other through their avatars. If you didn’t know what they were doing, you’d think they were in the same room playing a physical game.

I can imagine a world where the metaverse is even more helpful to people who don’t live in places where there are tons of opportunities to do cool things. Or to people who have physical challenges in the real world.

Think of older folks in nursing homes. Imagine being able to just strap on your VR gear and hang out with your grandkids, and to play with them in a world where you’re all on equal footing. It doesn’t get much coverage in the press, which tends to portray the metaverse as something for kids. But a lot of adults will find many things they like in the metaverse, too.

Chris: I know you’ve recommended the Roundhill Ball Metaverse ETF (META) as a good starting point. But last night, Teeka went live with another way to play the metaverse. Can you tell me more about that?

Nilus: META is a broad-based fund that gives you exposure to different companies set to profit as we move deeper into some version of the metaverse. But most of the companies in this exchange-traded fund (ETF) are large tech firms. Think Facebook parent Meta (FB) and Microsoft (MSFT), which are developing their metaverse worlds, and Nvidia and other chipmakers that’ll supply the computing power necessary for these virtual worlds.

If you want very broad exposure to this megatrend through the biggest companies set to benefit from the buildout of the metaverse, META is absolutely a good addition to your portfolio.

But Teeka has identified an even more potentially profitable strategy – the 22 metaverse IPOs (initial public offerings) slated for this year. Experts predict $1 trillion in funding will flow into these opportunities. The only problem is that many – but not all – of these metaverse IPO plays are overhyped and overvalued.

That’s why, last night, Teeka showed viewers how to tell the difference between the two types of metaverse IPO opportunities. He also revealed details of his No. 1 recommendation for playing this trend. So for readers interested in profiting from the metaverse megatrend, I recommend you catch the free replay of Teeka’s event here.

Chris: Thanks, Nilus.

Nilus: You’re welcome, Chris. Anytime.