🤖 Will Vision Pro make Metaverse mainstream?

GM gamers, investors!

This week we explore:

1. Apple Vision Pro and impact

   1. Bullish on Unity, but not buying now, waiting for the dip

   2. UE5 > Epic Games > Low price on Tencent?

   3. AR/VR and Metaverse - finally a mainstream?

2. SEC lawsuits and update

   1. SEC is coming after crypto, hard

   2. Most of the biggest tokens, including BNB, ADA, SOL, SAND, MANA are categorized as securities, plus US Binance and Coinbase are under fire

3. Last week's episode: 🚀Launchpads - are we there yet?

4. Updates: 

   1. New web is coming

   2. I’ll try to be more active on Discord to answer your questions and share more tips

We had a blast in Prague as there was a Prague Blockchain Week with tons of side events and amazing speakers, including Vitalik himself.

Let’s dive in

I’m sure you didn’t miss the big update of this week, Apple introduced their new, long-awaited toy - Vision Pro.

I don’t want to dive into extensive details, but if you didn’t see it I recommend checking these two videos:

1. Apple WWDC 2023 keynote in 26 minutes

2. Apple Vision Pro Impressions by Marques Brownlee

Instead, I would like to mention its impact on the market.

Impact 1 - Unity

Apple announced Unity as the engine to help developers build apps for their Vision Pro.

This is a big deal since Unity was losing market to Unreal Engine 5 and so this news resulted in a significant price increase of Unity stocks, specifically +25%.

My 2 cents: I wait for the dip to buy more

I started with Unity in May’21 because I noticed most web3 games used Unity to produce their content (just see how many SDKs are out there…).

At some point I saw > 100% on it but sold just a portion of the stock since I believe in it long-term.

Vision Pro will arrive in late 2023/early 2024, and even though developers will start preparing for it, we won’t see a financial impact until the Q3 (probably even Q4) Earnings call.

I don’t sell because of the spike (long-term believer), nor do I buy simply because this hype will fade off before the fundament kicks in.

I will buy the dip in the next 6 months, getting a better position when we see real results of Apple <> Unity and maybe even some web3 games jumping back.

Side effect - Tencent

Now what will this mean for Unreal Engine, therefore Epic Games, and therefore Tencent (holds 40% in Epic Games)?

Not much.

Since Epic Games has only around 2-3% revenue from Unreal Engine itself (the majority is from games, great breakdown here), the impact is minimal.

On the other hand, if you are bullish on Epic Games, Tencent is pretty cheap as per the forward P/E ratio which is 2.33x

There is a Geo political risk, but I bought more Tencent.

Impact 2 - AR/VR and Metaverse

This is the crucial part.

Apple has a history of taking fancy technology mainstream.

They were talking for a long time about their upcoming AR/VR tool, but it is finally here.

I don’t expect Vision Pro to make Metaverse mainstream, not at all, it’s too expensive, looks heavy, battery 2hrs and external, …

However, Apple will make sure people buy them anyway, test them properly, and maybe in late 2024, maybe in 2025 we will see a Vision SE version which will be in much better shape and more affordable.

Just remember these memes about iPhones when they started and now check what’s in your pocket / on your desk.

One more thing to consider.

In the demo, we see many times Vision Pro replacing classical TV.

I don’t want to jump into bold predictions, but I can see how having a headset might work better than fitting a 70” TV screen into every room where you want to consume some video.

Yes, one for every family member and possibly guests.

My 2 cents: I continue DCA (dollar cost average) into my web3/Metaverse portfolio, since I don’t expect immediate impact here, but the next bull run will be for sure an interesting one.

“We don’t need more digital currency … we already have digital currency — it’s called the U.S. dollar.” ~ Gary G.

So what happened? Three things actually,

1. June 5th, SEC files 13 charges against Binance and its founder CZ (here)

2. June 6th, SEC wants to freeze US Binance assets to protect customers (here)

3. June 6th, SEC charges Coinbase for operating as an unregistered securities exchange, Broker, and Clearing Agency (here)

Why? Fear of another FTX?

I don’t want to get political here, so I will just highlight that Binance is charged for doing similar things that were a catalyst for FTX's downfall.

That is mixing clients’ funds with CZ’s trading firm (remember Alameda and SBF?)

What does it mean for us?

The below cryptocurrencies suddenly should be treated as securities and therefore, fall within the SEC’s area of expertise and regulations.

Most of these tokens are down around 10-20%, SOL and BNB hit the hardest, but others follow, including gaming tokens like SAND, MANA and APE are down even more (~30%).

Binance saw an outflow of over $700m in a single day (on Tuesday) and then another $1.3b in the next 3 days, totaling around $2b outflow in a single week (details).

Binance is claiming since FTX time they have enough coverage and they don’t mess with clients’ funds.

If that is true, there is little risk since the funds go 1:1.

But if that is not true, we can expect issues with liquidity and we already know how that can end.

For me, this is just a bump on the road and we already know US retail will find a way, but with institutions, especially funds it’s a whole different story. So,

In the short term, this created an interesting buying opportunity (20% discount).

In the long term, we can expect more regulations and interventions from the US against cryptocurrencies and exchanges, resulting in capital outflow from US institutions.

If you are in the US, you should dive deeper and consider the risk of asset freeze.

My reaction?

As a non-US retail investor, I take this as an opportunity to buy the dip, so I bought the tokens I DCA today, which are ETH, SOL, AVAX, IMX, and a few gaming options, SAND, MANA, and APE.

I took my liquid positions away from Binance (not your keys, not your tokens), I will not lock my tokens there, but I keep using it as a main exchange to buy crypto with fiat.

I consider this as another reason why I think crypto will go down in the next few months. And that’s why I reduced my weekly buys by 60% in the last 6 weeks.

The main reason is liquidity. It’s not just about the FED rates, but the sum of money that can be used to buy crypto.

In the chart above you can see the money supply in the US in the last 12 months.

Enhanced by regulations and barriers for US institutions to buy in, there is simply less USD that can flow into crypto.

I believe until these two factors are managed, we shouldn’t expect another bull run.

I’m not a macro expert and I suggest you follow those who are, like Raoul Pal.

Next week we’ll dive into the EIP-6551 and how this can revolutionize gaming.

Plus we will do another dee-dive into a gaming project, this time https://parallel.life/