A GameStop NFT market was confirmed in the works by The Wall Street Journal recently. But while NFTs and other cryptocurrency trends get hyped to the moon, it's a nothingburger without the metaverse.
And one metaverse stock today could unlock a trove of backdoor profits before NFT stocks get their windfall.
Most traders hear GameStop Corp. (NYSE: GME) and think of the meme stock trading frenzy that changed the market forever. Robinhood Markets Inc. (NASDAQ: HOOD) users pumped GameStop stock more than 1,700% to squeeze short-sellers out of their positions.
The company was previously on the rocks amid the pandemic. But the GameStop NFT investment comes at a time when it needs to make smart decisions with the capital from all this new investment.
Depending on how you feel about NFTs, you might call it a brilliant venture or a failure from the jump.
It may look like the latter at first. You think, if they go all-in on NFTs, they rely on another meme frenzy to boost their market cap.
But GameStop NFT ambitions rest on a much bigger trend than "meme stocks," video games, or NFTs themselves.
These are tiny boats in a rising tide. And we're about to show you the stock to buy to invest in the tide.
First, here's what's happening with GameStop.
Why the GameStop NFT Market Place Could Flop
After months of rumor, GameStop confirmed putting together a 20-person team to work on an online marketplace for virtual items (NFTs).
It's starting with video games, of course, though NFTs encompass a much broader range of scarce digital assets.
The idea of an NFT marketplace is also broad - you can buy a variety of digital items on a site like OpenSea, or you can buy more specialized items in places like NBA TopShot. So far, there's no limit to what an NFT can look like.
Since GameStop caters to gamers, it will focus on cosmetic skins and other items that can be purchased in different games. For example, if you're playing as some medieval "knight" character, you might download a special, limited-edition armor that costs actual dollars in the real world.
Depending on how rare and liked the armor is, it could cost a pretty penny.
Total GameStop NFT investment could come to tens of millions of dollars in agreements between dozens of blockchain companies, according to The Wall Street Journal.
WSJ says GameStop's NFT investment could come to tens of millions in agreements among over a dozen companies.
At first glance, this looks hopeful for GameStop stock. The move is a clear attempt to salvage what it can after getting beaten against the rocks for years prior. Especially in the pandemic, its brick-and-mortar locations struggled.
You'd like to think GameStop is using its capital from new investors to the most beneficial end possible. The NFT market surpassed $40 billion in 2021, and with the metaverse (a huge use case for NFTs) not even in full swing yet, it's only getting started.
But there are still a few hurdles to overcome...
The Problem with NFT Adoption
WSJ said gamers were meant to be the early adopters in the NFT world. They're the demographic comfortable with spending money on virtual items.
The Verge, however, noted that adoption of NFTs has been a struggle in the gaming world.
The biggest reason? Skins and limited-edition weapons have been available for sale prior to NFTs. In other words, you didn't need the blockchain to get a kid excited about a special-edition superhero outfit.
This is why, for example, Valve, one of the biggest PC gaming brands, hasn't yet allowed NFTs on its Steam platform.
So, NFTs might not be the "cash cow" GameStop is looking for just yet. Best-case scenario, they have a long way to go.
Likewise, news of GameStop NFT investment won't necessarily pump the stock to high-heaven anytime soon either. The real value of the stock is still struggling regardless.
The company reported additional losses in its latest report. Due to increased investment, smart or not, people are worried about the company for many fundamental reasons. Hence, the share price is down 46% since November 2021.
Point is, the NFT market won't explode with video games. And a GameStop NFT market isn't guaranteed successful just because NFTs catch on.
Both NFTs and GameStop stock rely on a much bigger trend to thrive in the future: the metaverse.
And Money Morning's Shah Gilani has just the metaverse stock to buy before it all spikes...
The Best Metaverse Stock to Buy Now
At the core of all this technological hubbub is data. And the storage and sharing of data works through data centers.
Data centers are one thing, but we're looking even deeper...
Data centers have rent to pay, and Equinix Inc. (NASDAQ EQIX) is the largest data center real estate investment trust (REIT) by market cap in the world.
Equnix has 227 data centers around the world, moving 1,350 megawatts and 311,000 cabinets of power capacity. Equinix servers are on 26 million square feet of real estate in 26 countries, supporting over 10,000 customers, more than double the size of the next-biggest data center REIT.
This company will no doubt be participating in the metaverse revolution. While it trades for over $750, brokers like Robinhood will let you buy partial shares. So, get whatever piece of this company you can and see if it doesn't rocket upward before 2030.
23 Tiny Companies That Could Soar 1,000% in a Year
The richest people on Wall Street are jumping on this billion-dollar market, which could soon be worth a staggering $400 billion.
But you DON'T need to be a millionaire to get in on the action.
In fact, one of Silicon Valley's biggest insiders just shared 23 stocks he expects to jump 1,000% in just 12 months - and right now, they only cost pennies on the dollar.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.