Why ApeCoin (APE) Surged 26% Today. Should You Buy?

Tesla CEO and prospective owner of Twitter, Elon Musk, updated his Twitter profile photo to a collage of Bored Ape NFT images triggering the temporary price spike.

Earlier today, the ApeCoin (APE) token -- which launched in March of this year -- soared as much as 26% to a peak intraday price of $17.55 and saw its trading volume balloon 45% before giving back most of those gains, according to CoinMarketCap. What triggered the pump?

This morning, Tesla CEO and aspiring owner of Twitter, Elon Musk, updated his profile picture on that social media platform to a collage of Bored Ape Yacht Club (BAYC) NFT images. ApeCoin was inspired by Yuga Labs, which conceived and created the BAYC series of collectibles. Crypto investors likely saw Musk's BAYC montage move as a tacit endorsement for the ApeCoin project. Also, owners of APE got first dibs to buy virtual land in the BAYC metaverse project called Otherside this past weekend.

What is ApeCoin?

ApeCoin's official website states that the project is a tool to drive and enable a host of use cases including events, entertainment, gaming, collaboration, and more within the metaverse. It's worth noting that Yuga Labs' Otherside metaverse will also be accessible by other exclusive, high-priced NFT projects -- namely World of Women and CryptoPunks. Additionally, cryptocurrency exchange Coinbase is partnering with Yuga Labs to create and launch a three-part BAYC film series to promote further adoption and hype around the project.

ApeCoin runs on the Ethereum blockchain and was created to capitalize off the BAYC popularity. APE is governed by a decentralized autonomous organization (DAO) -- which means a community of voters who rely on smart contract programming actually oversee the project, while the APE Foundation executes community decisions in a transparent and public manner.

Should you buy ApeCoin?

At press time, APE is trading at $15.41 -- retracing from its high earlier in the day. With a current market valuation of $4.39 billion it's No. 30 in crypto market capitalization rankings based on CoinMarketCap data.

This is not financial advice, and investors should only invest what they can afford to lose and always do their own research. Having said that, there continues to be a lot of celebrity buzz and high-profile projects that are trying to link up with ApeCoin and the BAYC franchise. As BAYC grows, so will APE, which makes it worth a look for investors who don't mind Musk-induced price pops and drops.