Non-fungible token (NFT) prices continue to fall across the board, including prices for even the most popular NFT collections. Prices of NFTs in the Bored Ape Yacht Club collection, for example, have fallen by more than 50% during the past 90 days. Crypto media is filled with stories saying the Bored Apes are over and done. So it's no surprise that the price of ApeCoin (APE 3.77%), which is correlated with the prices of Bored Apes in the marketplace, is down more than 25% over the past 30 days.
But I'm not so convinced that it's time to give up on ApeCoin. The Bored Ape Yacht Club is still the benchmark NFT collection for investors to track. You can say the Bored Apes are over, but some of these NFTs are still fetching prices of $100,000 or more. Moreover, the creators of the Bored Ape Yacht Club have been taking concrete steps to create a real-world brand by commercializing their NFT intellectual property. That is going to create value for holders of ApeCoin. In the long term, the continued buildout of the metaverse could be another value driver for this controversial crypto.
From digital artwork to real-world brand
At this summer's big NFT conference in New York City, there was much talk about NFTs as brands. If you can convince investors that your NFT collection is a "brand" rather than merely "digital art," then NFT collections can become intellectual property that can be monetized. You could, for example, earn money by licensing characters from your NFT collection. You could also start to create entertainment experiences around that brand, as well as offer real-world products based on it.
This is something that the Bored Ape Yacht Club has done better than any other NFT brand. There is a burger restaurant in California featuring the Bored Apes. There is a Bored Ape subscription coffee service. And coming soon is something called Ape Water, from Ape Beverages Co. The idea of putting Bored Ape NFT images on canned water from California with the brand tag line "Water good for ape" is simple but brilliant.
Just be aware that the Bored Ape brand can be very polarizing. If people see you drinking a can of Ape Water, they might not assume that you are an environmentally conscious urban hipster leading the crypto revolution. Instead, they might assume you are a bored, churlish ape making ridiculous investment decisions.
The metaverse as catalyst
ApeCoin could also benefit from rapid growth in the metaverse. Until recently, the whole concept of the metaverse was very much in flux. The term seemed to mean different things to different people. The creators of the Bored Apes are, in fact, creating their own metaverse world called Otherside that will be powered by ApeCoin.
One thing everyone agrees on is that digital avatars will be a key component of the metaverse. People want to try on different personas and experiment with different identities, and that's where NFTs come into the picture (literally). In the case of the Bored Apes, people use these NFTs as profile photos on social media, and when they enter the metaverse, they want places to hang out as their Bored Ape avatars.
To understand how all this fits together, consider the latest MTV Video Music Awards (VMAs). This year's show featured the first-ever Best Metaverse Performance award. It featured Eminem and Snoop Dogg, both Bored Ape collectors, singing and dancing as their Bored Ape avatars in an imaginary metaverse world because, well, it's 2022.
Taking a contrarian view
ApeCoin has always been a misunderstood crypto. When it launched in March this year as "a token for culture, gaming, and commerce," it seemed as if it would have very limited appeal. It wasn't really a meme coin, and it didn't appear to have any real utility if you weren't a celebrity. In fact, it sometimes seemed as if you were making rich people even richer by buying the coin. So it's no surprise that the coin is down nearly 80% from its March 2022 highs.
But maybe the investment narrative around ApeCoin is poised for a shift. When you can see real-world products and experiences linked to Bored Apes, and when you can see high-profile celebrities still holding on to and promoting their Bored Apes, you realize there could be more room to run for ApeCoin.
This could be the right time to be contrarian, especially with ApeCoin trading at just over $5, a huge discount for a crypto that could be sitting on a very valuable trove of intellectual property. If you are willing to take on substantial risk, including the risk of losing everything, ApeCoin has vast upside potential.