ApeCoin (APE) Arrives with Volatile Trading
ApeCoin (APE) landed into the top 40 crypto coins and tokens, underscoring the growing popularity of NFTs. APE, as its ticker suggests, is linked to the Bored Apes Yacht Club and was airdropped to the owners of ape NFTs.
ApeCoin is now making the rounds and popularizing its utility, with significant availability on major exchanges and fintech services.
APE had a confusing start to its trading history, immediately crashing from nearly $40 to $6.37. This is not unusual for brand-new tokens. At one point, APE also showed more than 600% in appreciation. But the APE asset is solidly in unpredictable price discovery, and may go through erratic moves as a novelty token.
After a day of trading, APE moved up to $11.47, regaining some ground from the initial shock and upping its rank to 39 in terms of market capitalization.
What Caused the Launch of APE
APE is one of the perks for the exclusive BAYC NFT owners. This series of NFTs, which keeps up its high prices, is one of the most successful connections, supported by an enthusiastic community.
Owning ape avatars has become something of a status symbol. The project’s creators then wanted to create a self-governing organization, or a DAO, with the idea of using APE as a voting asset. However, the airdrop caused immediate selling, and it is unknown how many BAYC owners will also hold the asset for more than short-term speculation.
The airdrop initially distributed 15% of the total APE token supply, with the rest shared between a dedicated treasury, to Yuga Labs, the BAYC founders and as fees to the organizers of the airdrop. In total, 62% of the token’s supply will end up in the hands of the community.
APE can thus fall prey to further selling, either from the 10K tokens airdropped to each Bored Ape owner, or from the founders themselves.
APE is the token that gives rights to vote within the newly founded DAO, which will redistribute the significant funds in the treasury.
What is the Value of APE
APE was supposed to have value based on the market prices of Ape avatar NFTs. Currently, even the cheapest ape is valued at 89 ETH, as owners will not sell any of the items. Owning the NFTs opens the opportunity for more airdrops, as well as other exclusive features.
However, the ape avatars are rather illiquid and the notional value of APE is moving based on trading.
Because of the prominence of BAYC as one of the prime NFT collections, APE also gained an immediate Binance exchange listing. APE also immediately appeared on Coinbase and FTX Exchange, an unusual feat reserved only for high-profile projects that managed to convince those exchanges to immediately list.
The performance of APE will show the potential of NFTs to generate more value. Until recently, NFT collections competed for acceptance, with only a handful becoming a status symbol and an exclusive club.
The ApeCoin team warned to attempt token purchases only from official sources. APE is a token running on the Ethereum network, and can be stored in most available wallets, including MetaMask. Sending and receiving APE requires some amount of ETH for gas fees.
Can APE Become a Top 10 Token
APE has only 16,750 holders and a market cap above $3.18B. To become a top 10 token, it would have to compete with much more liquid assets. Even at above $40, the token would only reach the top 20 of coins, barely.
However, APE is highly concentrated in a handful of trading pairs, and may go through significant concerted trading efforts. APE has immense social media influence and may go through organized pump events.
APE is spreading quickly, riding on the popularity of BAYC. Within a day of its trading launch, it was added to the Crypto.com portfolio.
Despite the crash, APE has the potential to incentivize at least some of its recipients to hold the token and participate in future DAO-based decisions and investments. This is one of the arguments for APE becoming an influential token in the future, to reflect the holding of BAYC avatars and their immense value.
The news of the APE launch lifted BAYC avatar activity by 1,600% on the OpenSea marketplace.
Who is Behind Yuga Labs
The BAYC creation and the identity of Yuga Labs was not in focus for months, while ape avatars commanded exorbitant prices. The identity of the Yuga Labs founders was unearthed in February by BuzzFeed, linking two persons behind the pseudonyms “Gordon Goner” and “Gargamel”. Based on publicly available registers, BuzzFeed linked the two identities to Greg Solano and Wylie Aronow, the owners of a Delaware-based corporation.
The valuation of Yuga Labs at around $5B sparked questions whether it was acceptable to have pseudonymous projects when they operated such significant assets. The founders had attempted to extend the pseudonymity culture often seen in blockchain and crypto startups.
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