Are Bored Ape NFTs a good investment? – Advisor Forbes Australia

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Non-fungible tokens (NFTs) have taken the crypto market by storm in recent years.

While crypto enthusiasts insist that there are myriad possible use cases for NFTs, the most popular and valuable application of this unusual crypto technology has been in works of art that only exist on the blockchain.

By most measures, Bored Ape Yacht Club (BAYC) is the most successful NFT art collection. BAYC’s current market capitalization is valued at around $1.1 billion, according to CoinGecko.

In recent months there have even been stories of Bored Apes being stolen by pirates, including a bizarre phishing scheme involving actor and producer Seth Green.

“Well (guys) this happened to me. I was phished and four NFTs were stolen,” Green tweeted in May.

While stealing blockchain art apes might seem somewhat abstract, it’s easier to understand given the titanic valuations behind the Bored Apes. In April 2022, entry-level prices hit nearly $420,000 – that’s expensive art, making them big targets for burglaries.

So what’s the deal with these curiously named NFTs?

Here’s a guide to all things Bored Apes, including an overview of its history, meteoric rise, recent controversies, and stratospheric prices.

What is the Bored Ape Yacht Club?

The Bored Ape Yacht Club is an NFT collection created by Yuga Labs on the Ethereum (ETH) blockchain. Each individual NFT is called an Ape.

These digital artworks depict, well, bored simians. They all share a common look and feel, but each monkey features a unique combination of facial expressions, accessories, and outfits, so no two are the same.

It’s this combination of features – or the relative rarity of each combo – that may be the very thing that underpins the Bored Apes’ popularity. In the BAYC community, “rarity” is a formal measure of each monkey’s uniqueness.

There are dedicated websites that rate monkeys for their rarity. According to the rarity tools, Bored Monkey #8135 recently held the highest “custom rarity score”. Bored Ape #8135’s notable features include a dagger in his mouth, a “trippy captain’s hat”, and a silver earring.

Apart from the rarity, there’s nothing ostensibly unique about the artworks themselves – they’re just images of monkeys, after all. What separates BAYC from the crowd is that it has become a cultural phenomenon.

For NFT connoisseurs, owning a Bored Ape means more than just owning a digital cartoon ape – it’s a ticket to an exclusive membership club with perks like merchandise, parties and ApeCoins ( APE), among others.

How many Bored Ape NFTs are there?

Created via an algorithm, there will only ever be 10,000 Bored Ape NFTs in circulation.

As stated above, each monkey is unique. Although it may share one or more features with other monkeys, no two are the same. This explains the non-fungible nature of BAYC, which is key to NFT valuations.

The scarcity also means that BAYC NFTs are very illiquid. OpenSea, the largest NFT marketplace, has already taken steps to freeze the listing of certain monkeys if they are reported as stolen.

This action is considered controversial in some circles, as the intervention of a central entity goes against one of the fundamental pillars of crypto: decentralization. On the other hand, it helps prevent perpetrators from selling the stolen monkeys for crypto they can withdraw.

Who owns bored monkeys?

Celebrities, influencers, and everyday people own Bored Apes. Some BAYC owners use their monkeys as profile pictures on social media.

Well-known celebrities love their Bored Apes; Madonna owns BAYC #4988, Justin Bieber has BAYC #3001, and Tom Brady owns BAYC #3667, to name a few.

“The general public hears about a celebrity paying money for a BAYC NFT, which in turn creates validation and perceived value in the project itself,” says Dave Broome, CEO of the American company. Orange Comet, which launched several NFT collections.

Bored Monkey Awards

Bored Apes was first released in April 2021, with an original price of 0.08 ETH, or roughly $192 at the time.

The floor price of monkeys, the price of the cheapest NFT in a collection, has fluctuated wildly.

It peaked in April 2022 at around $420,000 almost a year to the day when the collection was released. But the BAYC floor price dropped amid the crypto downturn – now at 72 ETH, near $110,000. This is a drop of more than 70% in five months.

For rarer monkeys, the price has often reached millions of dollars. For example, BAYC #5383 sold on August 18 for 777 ETH, or around $1.4 million. The rare golden fur attribute is mainly responsible for its high price.

The most expensive monkey ever sold also has gold fur, BAYC #8817, sold at Sotheby’s “Natively Digital 1.2: The Collectors” in October 2021 for $3.4 million.

It is also important to remember that BAYC and most of the other larger NFT collections are denominated in Ethereum, which means that BAYC is not only subject to the volatility of the floor price itself, but also to the fluctuation of the price of ETH against the US dollar and other fiat currencies. .

BendDAO and the Bored Ape Yacht Club

The risk of liquidation of several borrowers at BendDAO could potentially lead to further advances. This NFT lending platform allows BAYC NFTs to be pledged on loans.

With a large number of Bored Apes pledged months ago when the price floor was significantly higher, the loans could be liquidated if the market sees a further decline.

Should this scenario materialize, there could be implications for the NFT market and BAYC’s influence.

With a persistent turbulent macro environment, Ethereum and Bored Apes will remain highly volatile going forward. BAYC remains an extremely risky investment, with significant downside and upside potential.

Flights of Bored Monkeys

Bored monkeys have been the subject of several thefts. Many wonder how this is even possible, given that these monkeys do not exist in the “real world” and are digital creations.

But if a hacker gains access to someone’s private key, they can transfer any cryptocurrency or NFT, including Apes. Incidents involving Bored Apes have drawn particular attention due to their high value compared to other NFT collections.

Several phishing scams have targeted Bored Ape owners, using methods such as accessing the Bored Ape Discord server before sharing phishing links in an attempt to get away with stolen apes.

What is a Mutant Ape NFT?

Yuga Labs has continuously expanded the BAYC ecosystem, driving increased demand for these digital creatures. This includes the launch of its sister collection, Mutant Ape Yacht Club (MAYC).

On August 28, 2021, 20,000 Mutant Apes were released, resembling mutated versions of their Bored Ape cousins. When created, each Bored Ape was exposed to a “Vial of Mutant Serum”.

BAYC holders had the ability to pair their unique NFT with the Mutant Serum, creating a Mutant Monkey in addition to the Bored Monkey they already held.

Half of the MAYCs were created this way. The rest was sold to the public via a Dutch auction, with $96 million in sales in less than an hour.

Mutant Apes is just another way Yuga Labs has transformed BAYC into a cultural juggernaut.

But with the pandemic-era bull market cooling drastically this year, prices for monkeys of all varieties have plummeted, leaving even their famous famous owners to hold the bag.

Note: When investing, it is possible to lose some, and very occasionally all, of your money. Past performance is not indicative of future performance and this article is not intended as a recommendation of any particular asset class., investment strategy or product.

FAQs

Why Are Bored Monkey NFTs So Expensive?

Bored Ape Yacht Club NFTs are some of the most popular and expensive digital artworks in the crypto and blockchain industry, but why?

The answer largely lies in their scarcity – there are only 10,000 available worldwide – but also because of the club’s exclusive benefits, including private online spaces, unique and members-only events, as well as than ownership of the full commercial rights to the NFTs.

Ownership of full trading rights is different from other collections, as collectors and investors are generally prohibited from trading the NFTs they purchase and are subject to terms of service.

How much is the cheapest bored monkey NFT?

Are NFTs worth it?

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