Is Now a Good Time to Buy ApeCoin (APE)?

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Contributor, Benzinga
June 29, 2022

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Bear markets can be extremely painful, but they often present viable investment opportunities. ApeCoin (APE), the native token of the Bored Ape Yacht Club (BAYC) non-fungible token (NFT) ecosystem, just might be one of them. It was launched in March by Yuga Labs, the company behind BAYC and quickly became one of the largest NFT-related cryptos in the world.

ApeCoin suffered a devastating almost 90% crash over the last two months (from its high all-time high). The token’s success heavily depends on Yuga Labs’ biggest project yet, Otherside. It will be an expansive metaverse role-playing game where players can use their NFTs as avatars. APE will be the lifeblood of Otherside, acting as its governance token and main in-game currency.

The cards are stacked in favor of the Otherside game and APE. Yuga is collaborating with the current king of the metaverse, the venture capital company Animoca brands, to build it out. The powerful duo backing the token along with its artificially depressed price gives it more moonshot potential than almost any other altcoin.

Is Now a Good Time to Buy ApeCoin?

Now may be a fantastic time to buy ApeCoin if you are a long-term investor who believes in the future success of Yuga Labs and the metaverse genre in general. It’s difficult to know when APE will hit its local minimum price. It may have already bottomed. It’s also possible APE will keep dropping for another few months before coming back up. APE has had an unusually volatile history, making it even harder to predict future moves. In the few months of its existence, it has reached a high of about $27.50 and a low of $3.20. 

However, if the metaverse trend continues to flourish and Yuga Labs and Animoca Brands can build a great metaverse game, it’s hard to imagine APE not reaching new all-time highs eventually. Those are both big “ifs,” but if they end up being true, APE could prove to be the best long-term altcoin investment of the year.

How Long Will the Crypto Bear Market Last?

No one can predict exactly when the crypto bear market will end. Far too many factors are in play in crypto and in the global economy. Crypto almost certainly won’t recover while the global financial markets are still struggling. When the stock market starts to return to normal, crypto prices will probably rise too. Past bear market actions help gauge the likeliest scenario as to when this might happen.

Yardeni Research, a leading global investment consultancy, recently released a report analyzing the length of the last 10 bear markets. It showed that the four bear markets since 2000 have included both the longest and shortest in modern history. The popping of the internet bubble in the early 2000s was the longest, taking 929 days (~2.5 years) to reach its lowest point. The shortest was the V-shaped recovery of 2020, taking only 33 days to bottom out. This drastic variance makes it extremely difficult to predict when this bear market might end.

Nevertheless, this bear market will likely fall somewhere between these marks. The average length of bear markets since 1950 is a little longer than a year. The U.S. stock market started to drop in early January 2022 so we should expect another 6 to 7 months of continued decline if the average is predictive. Likely, it will take awhile to start to see green again.

So how can you use this information to the best advantage? A favorite tried-and-true strategy is dollar-cost averaging. It’s a simple but powerful concept. Instead of making a small number of large purchases of an asset, investors buy small amounts regularly to average out their cost basis. Dollar cost averaging can work well in a market that eventually keeps moving up and helps removes the stress of trying to buy in at the best possible time. 

Dollar-cost averaging is an amazing strategy in a market that eventually keeps moving up. Eventually is the operative word here. It’s much riskier for a retiree with a limited amount of time to dollar cost average into volatile assets like single stocks or cryptos than say a millennial with 30 years until retirement. However, not all cryptos and stocks will increase in price no matter how much time you give them. Many will eventually be worth nothing. Investors should also take their own risk tolerance into account when making investment decisions.

Will ApeCoin Ever Reach All-Time Highs? 

ApeCoin has a decent chance of eventually reaching its all-time highs, but it will be more difficult than many other altcoins. Its peak, around $27.50 (depending on the exchange), wasn’t exactly natural. The price was heavily inflated by the Otherside NFT mint. Yuga Labs decided to tender the expensive sale in ApeCoin instead of Ethereum. It caused a massive spike when everyone bought the thousands of dollars worth of APE they needed to participate in the sale. 

The Otherside sale also caused an artificial crash in the price as soon as the sale ended. Lots of prospective minters who had already purchased their APE didn’t have enough money to pay for the high transaction fees (upwards of $6,000, not counting the mint price). Many of them had nothing else to do with the token, so they sold it for whatever they could get, dropping the price drastically. 

Yuga Labs is clearly dedicated to the success of the token and has carefully planned its future. Tendering the sale in ApeCoin over Ethereum seemed like an absolutely insane decision. Let’s work out the effects of this decision on the startup.

Yuga charged 305 APE per Otherside NFT in the public sale and sold a total of about 55,000 NFTs this way. Some minters got their APE from the free airdrop for holding a Bored Ape or a Mutant Ape. Most had to buy it on the open market right in the days before the sale when it was worth more than $20. At $20, it would cost north of $6,000 per NFT, more than 2 ETH at that time. The sale brought in 16.78 million ApeCoin, now worth a bit more than $75 million. If the company instead charged 2 ETH per NFT, it would be worth close to twice that figure. 

This decision really only makes sense if it already had extensive plans to heavily support APE in the future. It is hard to know exactly what this entails, but chances are APE is going to be a lot more than just a governance token. 

Is ApeCoin (APE) a Good Long-Term Investment?

ApeCoin is decidedly not as safe a long-term investment as the more established cryptos like Ethereum or Bitcoin. However, it has a higher chance of becoming a moonshot because of its relatively small size. ApeCoin is likely one of the better long-term investments in the metaverse space. It has a few major advantages over its competitors. Yuga Labs is one of the largest startups in NFTs and the metaverse. It has the resources it needs to make Otherside great, and it seems to be heavily dedicated to the success of APE. 

How to Buy ApeCoin (APE)

ApeCoin was listed on many of the top cryptocurrency exchanges in the world in the first few days after its launch. Two of the best trading platforms that offer the token are Coinbase Global Inc. (NASDAQ: COIN) and Gemini. Before you can buy ApeCoin, you will need to set up an account with the exchange and verify your identity. Generally, this process requires your Social Security number, address and a picture of your driver’s license or other valid ID. As soon as your identity is verified, you can deposit a different supported cryptocurrency or fiat currency and buy APE. 

How to Store ApeCoin Safely

Many traders keep their cryptocurrencies on the exchange they purchased them from without fully understanding the risks involved. It may be the easiest option, but it’s also one of the worst. Cryptocurrency exchanges sometimes fail, make mistakes or are robbed, leading to the loss of consumer funds. Recently, the cracks forming in large crypto funds and platforms like Celsius and 3 Arrows Capital are starting to show how real a risk this is. 

It’s almost always safer to custody your cryptocurrencies yourself instead of leaving them in the hands of exchanges. You can use two kinds of personal wallets: hot wallets and hardware wallets. Hot wallets, like Coinbase Wallet and MetaMask, are often easier to use but are more vulnerable to phishing and cyberattacks.

Hardware wallets are the safest option and are essentially impervious to cyberattacks because they are kept offline at all times. Personal wallets are usually safer, but you still need to be careful. Watch out for phishing attacks (make sure you are on the correct websites; never click on “support emails”) and make sure you don’t lose your recovery phrase.

The top hardware wallet brand in the industry by a long shot is Ledger. It offers three different models: the Nano S, Nano S Plus and Nano X. The Nano S is the basic model with everything you need to keep your cryptos safe. The Nano S Plus adds a larger screen, more memory for applications and easier use with NFT and DeFi platforms. The Nano X has the same larger screen and increased memory along with Bluetooth functionality for seamless on-the-go use. Ledgers support more than 1,000 different cryptos on many different blockchains including Bitcoin, Ethereum, Dogecoin, XRP and all ERC-20 tokens (including APE). 

How Does ApeCoin Fit In the Bigger Picture? 

ApeCoin fits squarely into the metaverse and NFT niche within the cryptocurrency ecosystem. Yuga Labs’ plans for APE line up with similar cryptos like The Sandbox’s SAND and Decentraland’s MANA. All three are governance tokens. APE will also be the native currency of the Otherside metaverse and Yuga Labs’ upcoming marketplace for trading NFTs and other in-game items. This setup is essentially identical to the functions of SAND and MANA in their respective metaverse ecosystems.

Currently, the token is little more than a governance token for the ApeCoin decentralized autonomous organization (DAO). Holders can vote on proposals that decide the future of the protocol. It can also be used to buy Bored Apes, Mutant Apes or Otherside deeds on OpenSea. More ways will emerge on how to use the token when a demo of the Otherside metaverse drops in July. Keep an eye on Yuga Labs’ social media accounts for more announcements on the token’s utility. 

So, Is Now a Good Time to Buy ApeCoin (APE)?

ApeCoin likely has a better chance of seeing new highs than many other altcoins, but it’s still a risky investment. The metaverse is touted as the next major technological movement, but its success is not guaranteed. The Otherside’s competitors, The Sandbox and Decentraland simply don’t have many active players. Turns out it's hard to compete against multibillion-dollar game development studios. However, it seems like if anyone in NFTs can do it, it would be Yuga Labs. It has a tremendous amount of capital, publicity and valuable IP. It could also be a better buy for long-term investors because the bear market probably isn’t ending for at least a little while. 


Is now a good time to buy ApeCoin?

If you are a long-term investor who believes in the future of the metaverse and thinks Yuga Labs is capable of building Otherside into a great product, this may be a great time to buy APE.

Can ApeCoin reach new all-time highs?

APE absolutely can reach all-time highs but will have to get through this bear market first. Watch out for APE’s possible move after Bitcoin and Ethereum start to stabilize.

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