For the past six months, the non-fungible token (NFT) market has been in free fall. Owners of expensive NFTs have seen prices collapse, and trading volume is down across the board on nearly every NFT marketplace and every blockchain. Even the Bored Ape Yacht Club -- generally considered to be the most successful NFT collection ever -- has not been impervious to falling prices and sagging market sentiment.

But things have been turning around both for Bored Ape NFT collectors and ApeCoin (APE 11.78%), the crypto that powers the entire Bored Ape ecosystem. Heading into December, floor prices of Bored Ape NFTs were up by nearly 34%, and the price of ApeCoin had sustained a 31% rally. So is it time to start thinking about investing in ApeCoin?

The rebound in the NFT market

Investors have several options for playing the NFT market rally. Most obviously, they could invest in blockchains such as Ethereum (ETH 0.04%) or Solana (SOL -0.52%) that account for the lion's share of all NFT trading and sales volume. But the best way to play the rebound in the NFT market is by investing in a pure-play NFT crypto such as ApeCoin. This gives you exposure to the full upside of any rally.

Coins with the word NFT stamped on them

Image source: Getty Images.

Generally speaking, there is a direct correlation between the price of ApeCoin and the price of NFTs in the marketplace. If prices of NFTs are trending up, the price of ApeCoin will also be trending up, and vice versa. As long as any NFT recovery continues into 2023, the price of ApeCoin should start to retrace some of its past gains.

Keep your eye on Bored Ape floor prices

If you are thinking about investing in ApeCoin, the metric to watch is not NFT sales volume or NFT transaction activity, which is how most people measure the overall health of the NFT market. Instead, the most important metric to watch is the floor price for an NFT in the Bored Ape Yacht Club collection.

This is publicly available information, and every NFT marketplace selling Bored Apes will tell you what the floor price is. There are 10,000 different Bored Apes in the NFT collection, and the floor price is the cheapest current asking price for a Bored Ape available in that collection. For example, right now the floor price of a Bored Ape on Ethereum's OpenSea NFT marketplace is about $86,000. You will not be able to find a Bored Ape cheaper than that on OpenSea.

All NFT collections take extensive steps to protect their floor prices, and for good reason. The floor price is the best indicator of popularity, scarcity, and overall demand for an NFT collection. If floor prices are collapsing, NFT holders have a real problem on their hands. Just ask pop star Justin Bieber -- he paid $1.3 million for a Bored Ape in January 2022, and by mid-November, it was worth less than $75,000.

Can ApeCoin sustain its mini-rally into 2023?

There is one very important reason ApeCoin might be able to sustain its recent 31% rise, and that is the introduction of staking rewards on the platform in early December. It will now be possible to stake both your ApeCoin crypto and your Bored Ape NFT and earn rewards.

Staking is generally considered a form of passive income in the crypto industry, so any opportunity to earn passive income for holding ApeCoin in your portfolio is going to make this crypto more valuable. Instead of holding a potentially worthless crypto governance token, you are now holding an earning asset. As a result, the introduction of staking rewards for any crypto is generally acknowledged to be a very positive event.

High risk, high reward

That said, investing in ApeCoin is not for the faint of heart. As noted above, when you invest in ApeCoin, you are investing in a pure-play NFT crypto. You are hoping to profit from the overall recovery in the NFT marketplace, which may or may not happen in 2023. And you are very much at the whims of consumer tastes. One year, all the rage might be Bored Apes, the next year, it might be Pudgy Penguins NFTs. The good news is that Bored Apes continue to sell for close to $1 million in the middle of a crypto winter.

Crypto is already very risky and volatile, and ApeCoin comes with a fair share of risk and volatility. But ApeCoin is simply too cheap, down nearly 86% from its all-time high earlier this year. At a current price of $3.87, ApeCoin is an unprecedented bargain. ApeCoin right now is the most direct way to profit from a rebound in NFT prices in 2023.