With the declining trend in the NFT market, no collection has endured the brunt of such drop more than the Bored Ape Yacht Club (BAYC). The metric that investors in the sector watch most closely, the floor price, plunged by approximately 82% from its high of 153.7 ETH. This shows that this portrait NFT collection has seen a significant drop in value early this year.
Even notable figures, such as Justin Bieber, have seen the worth of their Apes depreciate. For instance, the highest bid for Bieber’s Ape, valued around $1.3 million initially, now staggers just above $58,000 – a sizeable 95% decrease. However, it is essential to point out that early adopters of these NFTs are still in relatively good shape.
Simultaneously, it is worth noting that cryptos, not just the Apes, went through a similar phase of sudden escalation and crash over the past few years. An essential factor to consider is the behaviour of stakeholders when the going was favourable, with the Ape community acquiring a reputation for their egotistic and toxic characteristics. This, unfortunately, has led to weaker financial support for the asset.
Successful projects in the NFT space like the Wassies and Miladies can attribute part of their success to their vibrant and supportive community of holders. But the issue with Bored Apes is that, for the most part, the community has been aggressively marketed to a mainstream audience, a situation culminating in an insincere promotional segment featuring socialite Paris Hilton on Jimmy Fallon’s Tonight Show. Such promotion typically results in a fragile market composed mainly of speculators with no in-depth knowledge of the value proposition of the acquisition.
The logical consequences of these situations materialised recently when one prominent Ape owner dumped dozens of NFTs in the market in just a few days, thereby sending the market into a downward spiral. A robust community of crypto users and investors hence remains crucial for a healthy digital assets ecosystem. Bored Apes’ market scenario underlines the importance of organic demand and a devoted community of individual stakeholders as opposed to a group of speculators always ready to offload their bags at the slightest hint of a market downturn.
Further, with the drastic fall in BAYC, significant issues have emerged from members leveraging their Apes for loans. As values plummet, liquidations have surged, further exacerbating its dwindling market worth.
In conclusion, while it might be alluring to ape into a trending asset, investors must remain aware that the phase may well be temporary. If others are making outrageous profits, it may already be too late to profit from the surge. This is particularly true for community-oriented NFTs, where a rise in asset value may deter organic community growth due to increased speculation. Hence, it is never bad advice to tread cautiously when an asset begins inflating beyond apparent value.
Source: Coindesk
