Because of its recent sales turnover of more than $1 billion, the Bored Ape Yacht Club (BAYC) became one of the key reasons Wall Street should take the burgeoning nonfungible token (NFT) market seriously just months after its introduction in April 2021. BAYC, for the uninformed, is a collection of 10,000 cartoons featuring anthropomorphic apes with fashionable attire and shady looks. Each ape is essentially a picture file, which in a rational world would be useless. Despite this, they have been able to get amazing sums, often from some of the world's most famous personalities.
In November of last year, Jimmy Fallon, a prominent American TV personality, paid over $220,000 for the image of a Bored Ape wearing a striped T-shirt and heart-shaped sunglasses. Eminem, the Academy Award-winning musician, reportedly spent approximately $462,000 for an ape that resembled him. Meanwhile, one of the rarest Bored Apes, with gold fur, got $3.4 million at an online auction organized by Sotheby's in October, breaking the record set by another unusual ape with laser eyes, which was sold to The Sandbox for $2.9 million the month before.
The BAYC collection derives its value from NFTs, which are digital ownership proofs that are recorded on a public blockchain. Consider Bitcoin (BTC), but each “coin” is indivisible and one-of-a-kind in some sense. Meanwhile, most NFT projects, like BAYC, settle using the Ethereum blockchain and are valued in Ether, the native coin of Ethereum (ETH).
People spend millions of dollars for Bored Apes for a variety of reasons, not the least of which is their scarcity. People obtain entry to an elite membership club, imposed with tokens, in addition to possessing a distinctive avatar. This offers them access to an elite inner circle, granting them stature and more lucrative prospects. Evan Luthra, CEO and founder of EL Group International and a member of the BAYC's private club, described the attractiveness of the elite society. The membership, according to the 26-year-old angel investor, is something that is “very strong for the Wall Street folks.”
Another comment also stated “I think there is a new celebrity joining the club every single day.” Owners of Bored Ape collectables may also visit private message boards on Discord and receive privileged access to other NFTs. Owners of Bored Ape collectables may also visit private message boards on Discord and receive privileged access to other NFTs. Then there is a resale value associated with these NFTs, as seen by its growing “floor price,” which indicates the lowest offer that may be opened for the collectables. The BAYC floor price was 68 ETH, or roughly $217,800, as of January 7, up 380 percent from its mid-August low.
Noelle Acheson, head of market research at Genesis Trading, praised BAYC for being more adaptable in partnerships than CryptoPunks, one of the only high-profile NFT collectable series that before it. These collaborations include the release of BAYC-inspired Adidas apparel, the formation of a talent agency, the formation of a prospective Bored Ape music group, and the development of additional assets centred around the languid ape characters. Acheson explained in a statement “So, the concept of floor prices — which drives institutional investment in NFTs as well as their increasing use as collateral for loans — no longer depends just on how much investors think someone else will pay further down the road,”
“Floor prices, and an asset’s appreciation potential, now also depends on what else the NFTs can be used for, other than just displaying.” Luthra concurred, saying that the continued participation of celebrities with BAYC will increase its popularity among retail and institutional investors alike. This might increase demand for the NFT collection, causing its floor price to rise. Jelmer Rotteveel, the co-founder of NFT collection MoonwalkerFM, added another positive backstop to the BAYC core valuation: the continued excitement around Meta, rebranded from Facebook to suit the social media giant's metaverse goals.
Rotteveel added in one of his statements that “I believe that people will be looking more closely at the developments of NFT projects like BAYC, and, just like you saw with cryptocurrency, they will be stepping in one by one.” As previously noted, BAYC's net revenues just surpassed $1 billion, accounting for over 10% of what Apple will earn in 2021. Meanwhile, the NFT industry as a whole processed $41 billion in sales, which was nearly equivalent to worldwide art sales for the year, according to Chainalysis statistics. Bitwise Asset Management's chief investment officer, Matt Hougan, revealed that many of their customers were searching for exposure in the NFT industry without having to wade through its intimidating technology.
Bitwise responded by launching a dedicated fund last month that follows its own Bitwise Blue-Chip NFT Collections Index — a basket of the ten largest NFT collections weighted by market capitalization — and purchases and holds artworks from BAYC, CryptoPunks, and other NFT initiatives.
Hottest Crypto Casinos In The iGaming Industry