The latest Wall Street estimate for the metaverse is that it could be a $13 trillion market

The latest Wall Street bank to try to make sense of the metaverse is Citi, which says the market for it might reach $13 trillion.

In a 184-page research note, Citi defines the metaverse in a broad way, including not just headsets but even smartphones, to reach a market size of between $8 trillion and $13 trillion by 2030 with as many five billion users. Citi says augmented reality -- where images and sound complement reality -- rather than virtual reality, will be more ubiquitous.

Put a different way, the metaverse would be 1% of the estimated $128 trillion global economy, which doesn't sound too far fetched given that the digital economy accounted for 10% of U.S. output in 2018, before the pandemic.

But there's a need for major investment to get there. Only a quarter of the global population wlll have access to 5G speeds by 2025. And in any event, the Citi report, users aren't necessarily clamoring to get there.

What will the metaverse be used for? Gaming, for sure, but also entertainment commerce, advertising, education, healthcare, public services, tourism and training. There's already examples, such as the rapper Travis Scott performing a concert inside of the Fortnite game, or a virtual fashion week this month in Decentraland.

Popular metaverse gaming companies include Fortnite maker Epic Games, Roblox, Ubisoft and Microsoft, which owns Minecraft.

And of course, no metaverse discussion would be complete without an examination of cybercurrencies and non-fungible-tokens. The Citi report did point out the hype in the NFT space, saying wash trades, where a seller is on both sides of a trade, is rampant, creating a misleading picture of liquidity and artificially inflating value. Counterfeits and so-called rug pulls also are problems.

There already are gaming tokens with market capitalizations of over $1 billion: Mana for Decentraland, AXS for Axie Infinity, SAND for The Sandbox, APE for ApeCoin, and GALA for Gala. (Some $615 million was just stolen from Axie Infinity)

Citi expects different forms of cryptocurrency such as bitcoin and Ethereum to dominate, but also coexist with fiat currencies, central bank digital currency and stablecoins.