CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

With a virtual branch, JPMorgan stakes claim in metaverse

By Joyanta Acharjee

15:46, 16 February 2022

JPMorgan's Onyx branch in a virtual online world
A JPMorgan branch of Onyx has been created in a virtual world – Photo: Dacentraland.org

One of Wall Street’s biggest banks has become the first to create a virtual branch in the metaverse – a new virtual frontier full of business opportunity – it said in a new report.

A JPMorgan branch of Onyx – the bank’s cryptocurrency arm – has been created in blockchain-based virtual world Decentraland and features a roaming tiger and a portrait of the bank’s CEO Jamie Dimon.

With the average price of virtual real estate doubling in six months to $12,000 (£8,838 or €10,558) in December from $6,000 last June, the bank outlined numerous opportunities and some strategies in its report for companies to lean into the metaverse.

But what is the metaverse?

Metaverse defined

Timeline of the MetaverseTimeline of the metaverse – Credit: JPMorgan/Galaxy Digital

Although still early in its evolution, the metaverse is defined as a seamless convergence of physical and digital lives that creates a virtual community where people can work, play, relax, transact and socialise.

A key point is that there is no single virtual world but many worlds which are taking shape to enable people to deepen and extend social interactions digitally.

Among its advantages, the metaverse offers opportunities for transactions, with $54bn spent annually on virtual goods, opportunities to create with virtual world Second Life paying nearly $80m to platform creators, and opportunities to own, with the current market cap of non-fungible tokens currently at $41bn.

What is your sentiment on BTC/USD?

88071.80
Bullish
or
Bearish
Vote to see Traders sentiment!

‘Inflection point’

Web 2.0 vs Web 3.0 comparison chartBrave new web – Credit: JPMorgan

“We are now at an inflection point, where it seems that not a day goes by without a company or celebrity announcing that they are building a presence in a virtual universe,” JPMorgan said in the report.

“One of the great possibilities of the metaverse is that it will massively expand access to the marketplace for consumers from emerging and frontier economies.”

Questions

JPMorgan’s metaverse report not only highlights potential opportunities but helps businesses find their place in this brave new digital world by asking the following questions:

DOGE/USD

0.39 Price
+17.180% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

ETH/USD

3,255.20 Price
-2.160% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

BTC/USD

88,071.80 Price
+0.010% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

SOL/USD

213.84 Price
-2.650% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 2.2652
  • If your business and brand were in the metaverse, what value could you create for the community? Would you be a participant or a service provider?
  • If you are a consumer-facing brand, is there an opportunity to create new marketing channels through experiences, digital goods, sponsorships and a branded real estate presence?
  • How important is it to your business to target a younger generation audience and tech-forward sub-communities?
  • Do you have the in-house talent to help you navigate the metaverse? Is there a video gamer and/or crypto enthusiast on the team that you can spotlight and position to help educate the broader organization?
  • Do your competitors have a presence in the metaverse?

The metaverse will likely infiltrate every sector in some way in the coming years with the market opportunity estimated at over $1trn in yearly revenues, JPMorgan said.

“As a result, we see companies of all shapes and sizes entering the metaverse in different ways.”

Financial intermediary

JPMorgan also outlined its role in the metaverse as one of the first financial intermediaries.

“We believe the existing virtual gaming landscape has elements that parallel the existing global economy. This is where our long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, trading and safekeeping, in addition to our at-scale consumer foothold, can play a major role in the metaverse.”

“The asymmetrical risk of being left behind is worth the incremental investment needed to get started and to explore this new digital landscape for yourself,” JPMorgan concluded.

Crypto bear

Although the bank is leaning into the metaverse, JPMorgan CEO Jamie Dimon has long been a critic of Bitcoin.

“I personally think that Bitcoin is worthless, I don’t want to be exposed to it,” Dimon said at a virtual conference last October.

Dimon called the cryptocurrency “stupid” in 2017 and early last year advised people to “stay away from it” during a House of Representatives committee hearing.

Although Dimon is personally wary of Bitcoin, his bank launched its own cryptocurrency in 2019, operating on its proprietary Onyx blockchain.

Markets in this article

JPM
JPMorgan Chase & Co (Extended Hours)
239.57 USD
0.14 +0.060%

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 660,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading