Is ApeCoin a Good Investment?

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The Bored Ape Yacht Club has taken the world by storm with its fun and unique collection of non-fungible tokens (NFTs) by storm, with its unique and highly sought-after collection of digital ape avatars. One of the key components of the BAYC ecosystem is ApeCoin (APE), the native token that powers the community and allows holders to participate in governance decisions through the ApeCoin decentralized autonomous organization (DAO).

Since the establishment of the ApeCoin DAO in April 2021, APE has seen its fair share of price fluctuations. After an initial surge in value, the token has experienced a drop in price, leaving many investors wondering if APE will rebound anytime soon. Many in the BAYC community remain optimistic about the token's long-term potential. As the Bored Ape Yacht Club continues to grow and expand, new developments and partnerships could drive increased demand for APE, potentially leading to a price increase in the future.

Before you rush into buying ApeCoin, it's vital to understand its unique features, potential risks and long-term prospects. So, let's explore the ins and outs of ApeCoin to determine if it's a viable investment opportunity or a gamble not worth taking.

ApeCoin (APE) Overview

ApeCoin’s official token (APE) will act as the utility token for the APE ecosystem, focusing on strengthening the BAYC community. A utility token can be interpreted as a token that enables users to perform actions or initiatives on a certain network. Effectively, APE gives its participants a currency that can be used without any centralized intermediaries. 

The Ape Token is an ERC-20 token, a particular type of custom-made cryptocurrency on the Ethereum blockchain. As an ERC-20 token, APE can be used in four main ways:

• Incentivization: ApeCoin is a means for third-party developers to participate in the ecosystem by integrating APE into games, projects and other services. For example, APE Token is accepted in the Benji Bananas game by Animoca Brands. For 25 ApeCoins, you can buy a Benji Bananas Membership Pass, which allows you to earn an in-game token that can be swapped for APE.
• Access: APE Token will function as a gating token, providing limited access to certain parts of the ecosystem such as exclusive events, games and merchandise.
• Unification of spend: ApeCoin is the utility token of the APE ecosystem, meaning that it can be used to purchase products and services such as play-to-earn games that BAYC are developing. 
• Governance: ApeCoin is the governance token of the ApeCoin DAO, enabling holders of the token to vote on governance decisions within the DAO. 

The total supply of APE is locked at 1 billion tokens, so it is not possible to mint further tokens. The supply should never increase further than 1 billion. However, the developers created no ability to burn APE, meaning supply won’t decrease either. According to ApeCoin’s official website, Ape Token distribution is as follows: of the total supply, 62% belongs to the ecosystem fund, 16% is allocated to Yuga Labs and different charities, 14% goes to launch contributors and 8% is for BAYC founders. 

From the tokens allocated to the ecosystem fund, 150 million tokens were airdropped to holders of BAYC-related NFTs. The airdrop distribution depended on whether NFT owners held a Bored Ape or Mutant Ape and whether the NFT was paired with a Bored Ape Kennel Club NFT. The airdrop was allocated in the following proportions:

• Mutant ape = 2,042 tokens
• Mutant Ape + Kennel Club = 2,898 tokens
• Bored Ape NFT = 10,094 tokens
• Bored Ape + Kennel Club = 10,950 tokens

Interestingly, Yuga Labs claims zero responsibility for ApeCoin; however, the company is more than happy to take a significant portion of the profits. Since ApeCoin is coming from just ApeCoin DAO and not Yuga Labs, Yuga Labs can benefit from an independent entity allocating tokens to them as opposed to Yuga Labs pumping their own investments. However, this action is still a gray area as the U.S. Securities and Exchange Commission (SEC) still doesn’t oversee NFTs. 

APE Coin Price History

At present, ApeCoin is ranked 125th in cryptocurrencies by market capitalization. It reached an all time high of $39.40 in early 2022. This significant growth was predominantly driven by speculation that the "Otherside" metaverse land sale would be conducted in APE. The Otherside, created by Yuga Labs, is a new NFT metaverse project that launched on the 30th of April at a mint price of 305 APE.

At the time of writing, APE is trading for around $14.58, with a market capitalization of over $480 million.

ApeCoin Competition

ApeCoin can be classified as a fungible token investment into the NFT ecosystem. According to CoinGecko, ApeCoin is ranked 15th in top NFT coins by market capitalization. The biggest competitors to ApeCoin in the NFT and metaverse space are Axie Infinity, Decentraland and The Sandbox, the top three leaders in the NFT niche of the cryptocurrency market.

Unfortunately, given that ApeCoin is fairly new, Axie Infinity, Decentraland and The Sandbox benefit from a significant first-mover advantage. ApeCoin will need to work harder to gain market share and match its already existing competitors in terms of scale and partnerships. For example, BAYC co-founder Wylie Aronow stated that the goal is to create an interoperable word that is decentralized and gamified. However, ApeCoin has to compete with The Sandbox –– a gamified metaverse project that has already issued its second Alpha Pass, conducted virtual land sales and possesses partnerships with The Walking Dead, Adidas and Atari.

However, despite the lack of a first-mover advantage, a key competitive advantage ApeCoin possesses is its association with Yuga Labs, arguably the most influential presence in the NFT space. As a result, ApeCoin benefits from all the social capital associated with the Bored Ape Yacht Club, and all other projects in the Yuga Labs ecosystem.

ApeCoin (APE) Price Predictions: Experts' Opinions

Wondering how high can ApeCoin go? The NFT market is evolving rapidly, and the Bored Ape Yacht Club is no exception. Currently, the floor price of the Bored Ape Yacht Club may be down, but analysts stress the importance of understanding the value of specific NFTs within the collection. Factors such as floor price and the price of Ethereum are crucial in determining NFT value.

However, there are other elements that can influence the price and relevance of a particular NFT, such as cultural relevance, rarity ranking, and the celebrity status of the buyer. NFTs purchased by well-known figures like Justin Bieber or Snoop Dogg can often fetch higher prices due to their association with these celebrities.

Looking ahead, crypto experts are optimistic about the potential of ApeCoin. With favorable market conditions and ongoing development efforts, analysts believe that ApeCoin could become a prominent player in the crypto market. In fact, CoinMarketCap predicts that by 2030, APE token could reach a price between $20 and $34. Changelly is less bullish with an APE price forecast of $14.58 on the average.

Where to Buy ApeCoin (APE)

APE is already listed and trading on major crypto exchanges such as Coinbase Global Inc. (NASDAQ: COIN), Gemini, Crypto.com and Webull. However, at the time of the writing, Binance exchange possesses the most liquidity. The liquidity is centered around both APE/USDT and APE/BUSD trading pairs. This being said, any top exchange will have enough liquidity for retail traders to invest into the token.

Where to Store ApeCoin (APE) Safely

As ApeCoin is an ERC-20 token, the Trezor hardware wallet supports it by default because it supports all ERC-20. Hardware wallets store your keys offline, keeping your funds safe from online hackers. Software wallets like MetaMask and Coinbase Wallet are great for everyday use, but hardware wallets should store the majority of your funds you don't plan to sell in the short-term.

Is ApeCoin a Good Investment?

In summary, ApeCoin is a high-risk investment that has potential to provide astronomical returns. In the short term, there is likely to be extremely high volatility due to speculation that Yuga Lab's "Otherside" virtual land sale will be priced in APE. As a result, a prudent investor may wait for ApeCoin to stabilize before entering if high volatility persists. Nonetheless, the demand for APE may increase among investors due to the popularity and high demand of BAYC among price-insensitive investors like athletes and celebrities. Investing in ApeCoin could be profitable if you believe in the future success of the BAYC ecosystem and Yuga Labs compared to competitors.

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