The Metaverse, Crypto, or the Stock Market: Which Is the Best Buy for 2022?

Several stocks and cryptos are down off their highs as markets weigh the omicron COVID-19 variant risks, inflation, valuation concerns, slowing growth, and other unknowns.

Investors looking to structure their portfolio for a successful 2022 may be looking at the metaverse, different cryptos, and the U.S. stock market. Here are some top choices worth considering now.

Metaverse 

The metaverse is a hypothesized iteration of the Internet,  supporting persistent online 3-D virtual environments through conventional personal computing, as well as virtual and augmented reality headsets.

Metaverses, in some limited form, have already been implemented in video games such as Second Life. Some iterations of the metaverse involve integration between virtual and physical spaces and virtual economies.

Current metaverse development is centered on addressing the technological limitations with virtual and augmented reality devices.

The term "metaverse" has been used as a buzzword for promotion, and as a way to generate hype for public relations purposes by making vague claims for future projects. Information privacy and user addiction are concerns within the metaverse, stemming from current challenges facing the social media and video game industries as a whole.

Video games   

Several components of metaverse technologies have already been developed within modern internet-enabled video games. The 2003 video game Second Life is often described as the first metaverse, as it incorporated many aspects of social media into a persistent virtual world. Social functions are often an integral feature in many massively multiplayer online games. Technology journalist Clive Thompson has argued that the emergent, social-based gameplay of Minecraft represents an advanced implementation of the metaverse. Similar statements were made for the game Roblox, which has since employed significant usage of the term in marketing. Other claims of developing a metaverse include the games Active Worlds, Decentraland, and Fortnite in addition to a few early MUD games.

Cryptocurrency

Leading cryptos are down big off their highs after last weekend's sell-off that marked one of the quickest crashes of 2021. Bitcoin is back under $50,000. And Cardano , which had been underperforming its peers for months, is now down over 55% from its high.

Many cryptos are now a better value than a month ago at a lower price. But investors should bear in mind that leaders like Bitcoin, Ethereum , Solana , and Cardano are still all up over 65% year to date.

However, there's an argument that the crypto market deserves to be more valuable than in years past and even has the potential to keep going up from here. Bitcoin is a viable inflation hedge that can gain relevance as more countries and companies recognize its value. Ethereum is a balanced solution that is relatively decentralized, fast, and has a controlled supply. As the network on which so many projects are built, Ethereum is arguably the best crypto to buy now.

Solana is a high growth option that the rise of NFTs has fueled. Cardano has the makings of greatness. It wants to be a third-generation blockchain that solves the scalability and energy issues currently holding back Bitcoin and Ethereum. Cardano's growth has been hindered because it is arguably too sophisticated for the market as it stands today and the existing projects built on its blockchain lack fundamental value.

Stock Market 

U.S. stocks rose to a record Friday after in-line inflation data spurred bets the Federal Reserve won’t have to accelerate plans to tighten monetary policy.

The S&P 500 gained 1% and Nasdaq 100 added 1.1% as the headline rate came in at 6.8%, as expected, which is the highest since 1982. Meanwhile, the yield on the U.S. 10-year Treasury fell to 1.49% as traders trimmed bets on the pace of Fed tightening.

Investors had been looking forward to the inflation report and a meeting of the Federal Reserve next week for clues on the pace of tapering and interest rate increases, after Chairman Jerome Powell said the central bank should consider withdrawing stimulus at a faster pace. 

Gold jumped while the dollar dipped.

The in-line reading “is good news, relative to fears going in. People thought it would be much worse,” said Dennis DeBusschere, founder of 22V Research. “It is still a high number to be sure, but should reduce some worries on the Fed having to crush growth.”

Price Pressures Accelerate

U.S. November headline inflation increased by the most since 1982 on annual basis.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Foelber owns shares of Bitcoin, Cardano, Ethereum, and Walt Disney and has the following options: long December 2021 $155 calls on Walt Disney, long January 2024 $145 calls on Walt Disney, long June 2022 $170 calls on Walt Disney, short December 2021 $160 calls on Walt Disney, short January 2022 $150 calls on Walt Disney, short January 2024 $150 calls on Walt Disney, and short June 2022 $175 calls on Walt Disney. The Motley Fool owns shares of and recommends Bitcoin, Ethereum, Meta Platforms, Inc., and Walt Disney. The Motley Fool has a disclosure policy.

Resources: The Motley Fool, Wikipidea, Bloomberg