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

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

While crypto enthusiasts insist that there are countless possible use cases for NFTs, the most popular – and valuable – application of this unusual crypto-technology has been artwork that exists solely on the blockchain.

By most accounts, the Bored Ape Yacht Club (BAYC) is the most successful NFT art collection. BAYCS’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 hackers, including a bizarre phishing scheme involving actor and producer Seth Green.

“Well (friends), it happened to me. Got phished and had four NFTs stolen,” Green tweeted in May.

While stealing blockchain art tapes may seem somewhat abstract, it’s easier to understand given the titanic valuations behind Bored Apes. As of April 2022, entry-level prices reached nearly $420,000—they’re expensive art, making them prime targets for robbery.

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

Here’s a guide to all things Bored Apes, including a look at its history, meteoric rise, recent controversies and stratospheric awards.

What is Bored Ape Yacht Club?

Bored Ape Yacht Club is an NFT collection created by Yuga Labs on the Ethereum (ETH) blockchain. Each individual NFT is referred to as a monkey.

These digital artworks depict, well, boring monkeys. They all share a common look and feel, but each Ape has a unique combination of facial expressions, accessories and outfits, so no two are alike.

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

There are dedicated websites that score Apes for their rarity. According to Rarity Tools, Bored Ape #8135 recently had the highest “custom rarity score”. Notable features for Bored Ape #8135 include a dagger in its mouth, a “trippy captain’s hat” and a silver earring.

Rarity aside, there’s nothing apparently unique about the artworks themselves—they’re just pictures of monkeys, after all. What separates BAYC from the crowd is that it has become a cultural phenomenon.

For NFT cognoscenti, owning a Bored Ape means more than just owning a digital cartoon monkey – it’s a ticket that gives the holder access to an exclusive members’ 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 mentioned above, each monkey is unique. Although it may share a function, or several functions, with other apes, no two are identical. This drives BAYC’s non-fungible nature, which is key to NFT valuations.

Scarcity also means that BAYC NFTs are highly illiquid. OpenSea, the largest NFT marketplace, has previously taken measures to freeze the listing of certain monkeys if they are reported stolen.

This action is considered controversial in some quarters, as a central entity intervening goes against one of the core pillars of crypto: decentralization. On the other hand, it helps prevent perpetrators from selling the stolen Monkeys for crypto they can cash out.

Who owns Bored Apes?

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

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

I finally entered the MetaVerse…,……….. My very own monkey! 🦧 Thank you @moonpay 🪄 We all need protection from the evil eye. 🧿 pic.twitter.com/We5p9iy4hS

— Madonna (@Madonna) March 25, 2022

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

Boring Monkey Prices

Bored Apes was first released in April 2021, with an original coin price of 0.08 ETH, equivalent to around $192 USD at the time.

Ape’s floor price, the price for the cheapest NFT within a collection, has fluctuated wildly.

It peaked in April 2022 at around $420,000 almost a year to the day the collection was released. But the BAYC floor price has fallen amid the crypto slump – now at 72 ETH, nearly $110,000. That’s a drop of more than 70% in five months.

For rarer monkeys, the price has often been in the millions of dollars. For example, BAYC No. 5383 was sold on August 18 for 777 ETH, approximately $1.4 million. The rare golden fur trait primarily drives the high price.

The most expensive monkey ever sold also has gold fur, BAYC No. 8817, sold at Sotheby’s “Natively Digital 1.2: The Collectors” in October 2021 for $3.4 million.

#Auction update #BAYC #8817 sells for a RECORD $3,408,000 USD! This is the first time it has been made available since it was minted. Less than 1% of all dull apes have the golden fur trait. From the collection of @j1mmyeth #NativelyDigital pic.twitter.com/HfFTpEOIUh

— Sotheby’s Metaverse (@Sothebysverse) 26 October 2021

It is also important to remember that BAYC and most of the other major NFT pools are denominated in Ethereum, meaning that BAYC is not only subject to the volatility of the floor price itself, but also the fluctuation of ETH’s price against the US dollar and other fiat currencies. .

BendDAO and Bored Ape Yacht Club

Potentially causing further movement forward is the risk of liquidation for several borrowers at BendDAO. This NFT lending platform allows BAYC NFTs to be pledged as collateral for loans.

With many Bored Apes pledged as collateral months ago when the floor price was significantly higher, loans may be liquidated if the market sees further downside.

If this scenario were to materialize, it could have implications for the NFT market and the influence of BAYC.

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

Boring Monkey Theft

Bored Apes has 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.

However, if a hacker gains access to someone’s private key, they can transfer any cryptocurrency or NFTs, including Apes. Events involving Bored Apes have received extra attention due to their high value compared to other NFT’s collections.

Several phishing scams have targeted Bored Ape owners using methods such as accessing the Bored Ape Discord server before sharing phishing links to try and make off with some stolen Apes.

Our Discord servers were briefly exploited today. The team caught on and quickly resolved it. About 200 ETH worth of NFTs appear to have been affected. We’re still investigating, but if you were affected, please email us at [email protected].

— Bored Ape Yacht Club (@BoredApeYC) 4 June 2022

What is a mutant monkey NFT?

Yuga Labs has continuously expanded the BAYC ecosystem, increasing the 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 monkeys were released, resembling mutated versions of their Bored Ape cousins. In its creation, each Bored Ape was subjected to a “vial of mutant serum.”

BAYC holders had the option to pair their unique NFT with Mutant Serum, thus creating a Mutant Ape in addition to the Bored Ape they already had.

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

When I APE in I APE all the way in!! pic.twitter.com/3XB3Jo5Fb6

— Snoop Dogg (@SnoopDogg) 21 December 2021

Mutant monkeys are just another way Yuga Labs has turned BAYC into a cultural juggernaut.

But with the pandemic-era bull market cooling drastically this year, monkeys of all varieties have cratered in price, and even their famous celebrity owners are holding the bag.

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