The metaverse has a new platform, and it's one based on a franchise that nearly anyone who has been on the internet in the past year will recognize. Bored Ape Yacht Club (BAYC) (APE +0.03%) launched land sales for its Otherside on April 30. People who have been fans of the cartoon primates will be elated; those who think a bunch of non-fungible tokens (NFTs) of primate drawings are silly things to spend money on will almost certainly come in as skeptics.
However, for metaverse real estate investors, Otherside represents a new investable platform. With just 200,000 lots ultimately available (only 55,000 lots were released to pre-approved wallets at the initial offering), many metaverse investors are trying to decide if buying into BAYC's Otherside is a smart move for their virtual real estate portfolios.
CRYPTO: APE
Key Data Points
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What sets the BAYC apart from other new metaverse platforms
Since the sudden rise in interest in blockchain-based metaverse platforms, several new worlds have come on the scene, some of which appear to be little more than attempts to ride the rising interest. Shiba Inu's (CRYPTO: SHIB) SHIB: The Metaverse, for example, is a case where hype likely has overcome good sense, with few details on how the world itself would work before the sale and numerous problems on the big day.
Otherside wasn't without its own struggles on initial land sale day, including some pretty ugly problems with transfer fees (known as "gas fees") due to the sheer number of lots being registered at once. However, unlike SHIB, BAYC folks have made up for a lot of those stumbles by working to build the brand long before they set out to build a metaverse around it.
For example, they've been courting large real-world brands and mainstream celebrities since the NFT collection launched in April 2021. BAYC owners also get additional benefits from their NFT ownership, including social clubs in their respective cities with events for members only, which adds to the utility of the NFT.
Because of the efforts of BAYC founders (and the community they built), it can be expected that brands will be pretty excited to get in on this specific metaverse space. From a BAYC film series in production with Coinbase (COIN 4.14%) to collaborations with brands like Adidas (ADDYY +0.64%), BAYC has generated a lot of interest starting with nothing but 10,000 pictures of primates in different outfits. It's a cult following, to be sure, but it's one that spends most of its time trying to be as mainstream and accessible as possible.
Where SHIB projects an air of unearned exclusivity and secretiveness, BAYC steps into the public with the warmth of a beloved public figure who truly wants to connect with their fan base. BAYC is basically the Betty White or Richard Simmons of the blockchain.
When to buy land in BAYC's Otherside metaverse platform
The initial land sale for Otherside took place late on April 30, with a remarkable 55,659 primary sales (sales from the platform to users for the first time) and 13,258 secondary sales (those initial land buyers reselling their plots almost immediately) within the first 24 hours. These transactions were worth over $646 million. The average sales price that day was $9,374.42, and it rose to $15,174.56 as of May 6.
That's a huge gain, to be sure, but what we've seen in these metaverse initial land sales is that there tends to be a huge spike in prices right off the bat. Initial land sales prices tend to be pretty low because the gas fees are also part of the cost of acquisition that first time and can often be somewhat unpredictable. By the time the virtual land has entered the secondary market, sellers want to cover the cost of purchase and of transfer and then a little more. However, over time, the land finds its real price and settles in accordingly.
Investors would be smart to get a piece of the land of the APEs, but not today. Give it a few weeks, let the excitement ease, and see where the dust settles. The best time to buy in Otherside was at the initial land sale (other waves are coming, so you can also choose to take your chances and wait for the next round), but the second-best time will be around the end of May or early June, once speculators have gotten out of the picture.
Waiting that long in the world of crypto is itself a great risk because no one knows where crypto is going on any given day. But because APE, the coin of Otherside, has dropped 44% since April 28, land prices following the same trend would not be at all unexpected.
Crypto assets run in cycles of hype and mellow before they settle. However, with BAYC, it's important to keep an eye on the market, since the assets do have a strong following and the risk exists that they won't find balance for long before a new cycle begins. It's going to be a great opportunity for metaverse real estate investors who get in at the right time.
