- For Hashdex CEO Marcelo Sampaio, asset devaluations do not reflect the progress of the project, but occur during an investment stampede that is considered risky.
- META11 will provide investors with exposure to crypto assets from the blockchain culture and entertainment industry
- NFTS11 is the first ETF that invests in Metaverse and is listed on the Brazilian Stock Exchange, losing 66.92% of its market value since its launch
The META11 Metaverse ETF was launched on B3 this Friday (3). The product will provide investors with exposure to crypto assets from the blockchain culture and entertainment industry, echoing the “CF Digital Culture Composite Index,” which invests in digital projects, technology-enabled protocols and blockchain platforms.
META11 follows in the footsteps of NFTS11, the first ETF to invest in the Metaverse and onto the Brazilian stock exchange, debuting in April. However, the fund has lost 66.92% of its value since its launch.
In times of risk aversion, digital assets have suffered huge losses. The value of the main cryptocurrency Bitcoin has fallen by more than 45.31% in 2022. This devaluation was also observed by Hashdex, the manager of META11. The five EFTs launched by the manager have fallen significantly during the year. BITH11 was the one with the smallest decline, depreciating 45.21%. ETHE11, the biggest loser, depreciated 58.68%.
For Hashdex CEO Marcelo Sampaio, asset depreciation does not reflect the progress of the project, which happens when investments deemed risky, including cryptoassets, are stamped. According to him, investors must observe whether the paper is reliable and its growth potential.
“Who is interested in such a product? [ETF de metaverso] We must pay attention to the long-term and development of this sub-industry. It doesn’t matter if it goes down or up, but if you believe the industry can be much bigger than it is, keep growing, creating value and solving problems,” Sampaio said.
Currently, the new EFT mirrored indices invest in the following assets: Decentraland (MANA), The Sandbox (SAND), Axie Infinity (AXS), Enjin (ENJ), Chiliz (CHZ), Audius (AUDIO), Chainlink (LINK ), Polygon (MATIC), Graph (GRT) and Ethereum (ETH).
The total management fee for META11 is 1.3%, and Hashdex estimates the initial quota amount to be R$50.
Sampaio understands that the metaverse accelerates the digitization of the real world, but it’s already happening on platforms like email, Facebook, and Twitter. “It’s a very interesting time. The younger generation is living a much more natural life in the virtual world than we thought,” said Hashdex’s CEO.
Check out the highlights of the Hashdex CEO interview electronic investor:
E-Investor – Risk aversion punishes cryptocurrencies, is now a good time to launch Metaverse EFT?
Sampaio – we try to team, because we are long-term investors in crypto assets. Therefore, we want to serve the market with projects that we think are relevant and will be important in the future. To us, honestly, it makes no difference whether the market goes up or down. It makes a difference if we think the paper is solid, has growth potential, and investors should pay attention to it.
What do you think is a solid argument for Metaverse EFT?
Sampaio – When we understand the maturity of the model, or at least there are enough interesting models to show that the business will grow. In the case of the metaverse, we’re seeing not just an impact on art, but gaming in particular. According to the nature of this game, the logic that you should be compensated for playing and creating an entire economy. It’s a game’s sword that can have a secondary market and can be brought to another game, just like you take the couch from home when you move. The idea of creating an open economy is very powerful, very interesting, and has irreplaceable assets. A lot can be created around it.
We already have evidence of events with the ability to digitize the physical world, not just in games or art. There are very obvious use cases for NFTs, but they will still evolve in the future. How to own an NFT as your identity. You have one, I have one. What digital representations will we have in the future?
There are many things that involve blockchain. These models provide enough hints that an industry will be created within these concepts. Whether it’s something that has been proven or something that hasn’t happened yet. This reasoning sheds some light on these investments.
ETFs launched by managers fell sharply. Why should investors believe this time will be different?
Sampaio – The market is falling due to investor risk aversion. This goes beyond not only the metaverse, but any asset with a higher level of risk. That’s not to say the asset is bad or doing poorly, especially if you have a long-term view. If you look at the fundamentals, the technology is developing a lot for basically every project. It is used by more and more people, and they are more integrated with the system and its various uses. But this is speculative, and we don’t know the future.
Anyone interested in this type of product must understand the long-term and development of this sub-industry. Whether it’s down or up, what matters is whether you believe the industry can be much bigger than it is and continue to grow, create value and solve problems.
How do you understand the function of metaverse?
Sampaio – It’s a huge process of digitizing the real world we know and even creating the world we don’t know. The process has not started yet, we have been digitizing ourselves for a long time. From the moment you receive your email, the scan of the real world begins. There is also a Twitter account. What’s happening today is that it’s starting to become more immersive because of the technological advancements we’ve observed. You can live your life in a virtual world, having fun and building closer relationships because the tools are better.
When you combine it with the blockchain, the crypto world shows that this will be greatly accelerated. Because it puts the missing pieces into the world. Blockchain creates this interactivity, where value can be transacted in the same way as the real world, but digitally and in a completely open world. In the art world, there are already digital-only files.
You start simulating the physical world in that digital world. This is a very interesting moment. Life in the metaverse for the younger generation is much more natural than we think.
What is the profile of investors looking for ETFs offered by Hashdex?
Sampaio – HASH11 with more investors follows traditional financial markets. They are clients such as managers, funds and even retail investors. But these themed products are for different investors. They are people related to a particular topic, they study it, or basically believe in the paper.