Reddit cofounder Alexis Ohanian shares why he's bullish on the metaverse - and calls Facebook's rebrand a masterstroke in distraction

• Alexis Ohanian said he's bullish on the metaverse because of the rise of crypto and Web 3, human engagement with virtual and augmented reality, and the need for online connections.
• Facebook's move to rename itself Meta is a "masterstroke in diversion and distraction," he said.

Alexis Ohanian, who cofounded Reddit in 2005, said the rise of cryptocurrencies and the third generation of the web are giving him reason to be bullish on the idea of the "metaverse."

"We're talking about sort of all of us being able to go online and occupy digital spaces, much the same way we do physical today," he said on CNBC's "Squawk Box" on Friday.

Ohanian noted that people already engage in the virtual world somewhat on their phones and computers, using text and images to interact. But he feels engagement via virtual reality goggles or augmented reality - VR or AR - will give rise to a whole new phenomenon with a lot of investment potential.

"I spent 15 years trying to convince people leading Reddit that people would care about online connection just as much or more than offline connection. But now I think everyone sort of takes it for granted - we fall in love online, we make some of our best friends online, we ape into stocks together online through anonymous communities," he said.

"That dynamic combined with broadband ubiquity, and now the rise of web 3 and crypto really working, gives people a sense of ownership in this new world. So that the assets you buy in the metaverse are just as real as the assets you buy and own in the offline world."

When Facebook changed its corporate name to Meta on Thursday, it said it wanted to be "metaverse first." The idea of a metaverse has been around for a while in science fiction and gaming, used to refer to a virtual space where real-world people can live a whole other life using VR and AR avatars.

Facebook's CEO Mark Zuckerberg predicted "the next platform and medium will be even more immersive, an embodied internet where you are in the experience, not just looking at it."

Ohanian said Facebook's decision to rebrand itself was "a masterstroke in diversion and distraction" that shouldn't be underestimated.

"Right now, there is this amazing bottom-up movement to create the metaverse, using what's happening in the crypto community - getting a lot of people building what I think is what most of us hope will become a much more organic type of world, rather than a sort of top-down Facebook-imposed one."

The Reddit cofounder suggested there is potential for a funding boom in metaverse-related start-ups.

"With the amount of money that's flowing into venture right now, startups that can get competitive on the VR front, they can get the funding," he said.

"But the bigger things here are going to be more foundational software," he added, touching on Facebook's advantage from its virtual-reality headset formerly known as Oculus.

"That's the stuff that's going to get built in the next five years," Ohanian said. "It's actually going to make it worth it for you to spend time, because right now the competition is watching Netflix, playing Fornite, scrolling through your phone."

"We're not going to all wake up in the metaverse tomorrow."

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