What happened
Keeping up with the ApeCoin (APE -2.20%) news and rumors has been dizzying for those trying to invest in the Bored Ape Yacht Club adjacent token. We do know that the token will be used to mint a relatively unknown NFT called an Otherdeed from Yuga Labs, but speculation has been flying about mint pricing and details.
Investors and NFT enthusiasts have been preparing for the mint since the ApeCoin came out and there was a surge in demand this week that sent the token to a high of $27.79, which would give it a market cap of $24.79 billion. But the value plunged to a low of $18.40, a 33.8% drop, in only a day after mint details were announced. The value has recovered to about $22.00 as I'm writing and here's what you need to know as mint day begins.
Image source: Getty Images.
So what
The reason ApeCoin jumped as much as it did in recent weeks was speculation that the NFT launch would be a Dutch auction. This has been a common minting method in recent months and investors hoping to buy Otherdeed NFTs were positioning themselves with as much ApeCoin as possible in order to participate and maximize what they could buy.
Late on Thursday, April 28, Yuga Labs announced that the mint would cost a flat 305 ApeCoin, reducing the need for anyone to hoard tokens. There will also be a limit to the number of NFTs per wallet that can be minted, starting with two NFTs for the first wave. Naturally, that announcement led to a steady drop in the token's price.
The value of ApeCoin recovered after NFT marketplace OpenSea confirmed that it would accept ApeCoin for at least some NFTs, potentially including Otherdeeds. More use cases for ApeCoin should help the value long-term, so that's seen as a good thing.
Now what
The news is dizzying, which isn't unusual for a Yuga Labs project. People have gotten used to late announcements and unknown value and utility in the NFT space and Yuga is arguably the best in the business at doing the unexpected.
It's also clear that there are thousands, or tens of thousands, of people clamoring to mint the Otherdeed NFT in anticipation of it being extremely valuable in the Bored Ape Yacht Club metaverse. That demand alone will put a floor on the ApeCoin selling.
Opensea's acceptance of ApeCoin is probably less meaningful because more NFT marketplaces are accepting tokens from projects, although ApeCoin is clearly the largest.
The question now is where we go from here? We know that the mint is April 30, 2022, with a staggered minting process that will likely take many hours. But 55,000 NFTs are expected to be minted and this will be on the Ethereum (ETH 0.15%) blockchain, so there could be a significant amount of the Ethereum token spent on gas to complete transactions. In secondary sales, we could see a surge of volume on OpenSea and so far it's unknown whether those sales will be in ApeCoin or Ethereum.
Another thing to consider is that metaverse projects can be extremely high hype but if we look at The Sandbox (SAND -0.60%) token, which has a similar structure to ApeCoin on Ethereum, the value is down 69% since peaking in November 2021 and shows to signs of slowing its fall. The hype sometimes doesn't match what's delivered.
We'll learn a lot on Saturday, but with Yuga involved I would expect the unexpected.
