With Web 2.0 nearing its end, experts and market observers are turning their attention to the next iteration — Web3.
Due to the fact that Web3 is still in its early innings, not all exchange traded funds, particularly those addressing international equities, are levered to this new theme. The Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) is a prime example of one that is.
“The broader ideals of the Web3 movement embrace transparency, decentralization, and trust that is built using decentralized blockchains and a shared ledger system using crypto or CBDC’s (central bank digital currencies.),” according to EMQQ’s issuer.
Web3’s elements of blockchains and digital currencies are relevant in the EMQQ conversation because, following the fund’s most recent rebalance, its fintech equity exposure increased in dramatic fashion. That positions EMQQ as potentially a prime beneficiary of Web3 expansion.
On that front, some patience on behalf of investors is required because fintech itself remains an emerging concept. Likewise, some early Web 2.0 concepts encountered bumps, and that’s likely to be the case with Web3.
“Newer marketplaces emerged to solve these problems with a series of innovations to create/ improve trust like payments and escrows, and user profiles with ratings. Marketplaces are owned and governed by investors, who while mostly aligned with their users, are not 100% aligned,” adds EMQQ Global.
Other elements of Web3 that should be evaluated are augmented and virtual reality, which will drive the “experiential web.” Those concepts blend not only with crypto and fintech, but the emerging metaverse as well. In fact, it’s possible that as the metaverse expands, some folks will spend more time in virtual universes than traditional physical spaces, potentially benefiting multiple EMQQ holdings over the long term.
“As we continue to see the rise of the global middle class and as digital experiences get more complete, those people for whom the physical world is less sweet will retreat deeper into their individual virtual universes. In a sense, the physical world will become just another parallel and peer world some people inhabit—not something different or special, just the original world,” notes EMQQ Global.
From an investment perspective, the allure of the metaverse and Web3 is undeniable. Users will be drawn to these spaces due to decentralization, robust privacy protections, and dependable technological backstops, among other factors.
“NFTs, cryptocurrencies, metaverse, and other blockchain entities are going to be crucial to Web3, but it also goes beyond just crypto. It offers a new way that combines the best aspects of the previous eras,” concludes EMQQ Global.
Bottom line: Patience will be a virtue with Web3, but EMQQ could deliver over the long haul.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.