A Grayscale November 2021 report titled, “The Metaverse, Web 3.0 Virtual Cloud Economies,” written by Grayscale’s head of research, David Grider and research analyst Matt Maximo, focused on metaverse education and explaining the possibilities that this new phenomenon brought along with it, stated that the metaverse represents a $1 trillion annual revenue market opportunity.

The report also stated that revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020. The overwhelming majority of that $400 billion will be in-game spending, compared to spending on premium games.

It stated, “Our social lives and gaming are converging and creating a large, fast-growing virtual goods consumer economy. It is estimated that revenue from virtual gaming worlds could grow from ~$180 billion in 2020 to ~$400 billion in 2025.”

Grayscale is a digital currency asset management firm that offers single asset and diversified exposure via private and public funds. As of the time of this writing, the company has over $52 billion Asset Under Management (AUM).

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The report stated that metaverse platforms integrated with crypto tokens and decentralized finance services such as staking and lending, nonfundible tokens (NFT), decentralized governance and decentralized cloud storage have “created a new online experience” that is rapidly attracting new users.

The report also mentions examples with projects like Decentraland, which allows people to interact, govern and earn tokens, and get real-world benefits for their time spent online. It explains that people are spending more and more time online, and they concurrently spend money to build social status within digital realms.

It also highlighted that in the third quarter of the year, total crypto investments was $8.2 billion, from which $1.8 billion (21.95%) went to Web 3 and non-fungible tokens (NFTs). It remarked that fundraising for gaming applications overshadowed all other verticals of NFTs in the third quarter, hitting around $1 billion.

The report notes a range of key dynamics that could significantly contribute to the growth of the metaverse sector, which includes growing average leisure time and money spent on digital hobbies, a cultural shift from premium games to free-to-play gaming, and Web 3.0 innovations such as play-to-earn.

The report says that compared to the $10 billion that companies like Facebook plan to invest, and the amounts that could follow from other companies and venture capitalists, the Metaverse is in its early innings.