Bored Ape Yacht Club is a huge mainstream hit, but is Wall Street ready for NFTs?


A few months after launching in April 2021, Bored Ape Yacht Club (BAYC) has emerged as one of the main reasons why Wall Street should take the emerging non-fungible token (NFT) market seriously, thanks to its revenue recent over $ 1 billion.

Celebrities make BAYC their own

For the uninitiated, BAYC is a collection of 10,000 cartoons of anthropomorphic apes with stylish clothes and unsavory expressions. Every monkey is practically an image file that should be worthless in a sane world. Nonetheless, they have managed to collect astonishing amounts of money, sometimes from some of the most famous celebrities in the world.

For example, Jimmy Fallon, a popular American TV host, bought the image of a bored monkey who wore a striped t-shirt and heart-shaped sunglasses for almost $ 220,000 in November of the last year. And very recently, Oscar-winning rapper Eminem paid almost $ 462,000 for a monkey that looked a little like him.

Eminem’s bored monkey, nicknamed BAYC # 9055. Source: The Guardian

Meanwhile, one of the rarest bored monkeys, which had a streak of gold fur, fetched $ 3.4 million at a Sotheby’s online auction in October, breaking the record for ‘another rare monkey with laser eyes, which was sold in the sandbox for $ 2.9 million a year. months before.

But what’s the selling point?

The BAYC collection derives its value from NFTs, digital proof of ownership recorded on a public blockchain. Think Bitcoin (BTC), but each “coin” is indivisible and unique in some way.

Meanwhile, most NFT projects, including BAYC, settle through the Ethereum blockchain, at the cost of its native Ether (ETH) token.

But scarcity isn’t the only reason people pay millions of dollars for Bored Apes. In addition to owning a unique avatar, people also get admissions to an exclusive membership club, imposed with tokens. This gives them access to a select circle of elites, giving them more profitable status and opportunities.

Evan Luthra, CEO and founder of EL Group International and exclusive member of the BAYC club, discussed the appeal of the elite association. The 26-year-old angel investor called the membership something “very strong for the people of Wall Street.”

“I think there is a new celebrity joining the club every day.”

Bored Ape collectibles also allow their owners to enter private message boards on Discord and gain privileged access to other NFTs.

Bored Ape Yacht Club “floor price”

Bored Ape collectibles also allow their owners to enter private message boards on Discord and gain privileged access to other NFTs. And then there is some resale value attached to these NFTs, as evidenced by its rising “floor price”, which reflects the lowest bid one can open for collectibles.

As of January 7, BAYC’s floor price was 68 ETH, or around $ 217,800, up 380% from its low in mid-August.

BAYC floor price table. Source: CoinGecko

Noelle Acheson, head of market analysis at Genesis Trading, acknowledged that BAYC was more flexible in collaborations than CryptoPunks, one of the only leading NFT collection series that came before it.

These collaborations include Adidas gear inspired by BAYC, the signature of an artistic agency, a potential Bored Ape Music Group, and other related assets emerging around the languid ape characters.

“So the concept of a price floor – which stimulates institutional investment in NFTs as well as their increasing use as collateral for loans – no longer depends solely on how much investors think someone else will pay later.” , Acheson explained, adding:

“Floor prices and the appreciation potential of an asset now also depend on the use of NFTs, other than display. “

Luthra agreed, adding that continued celebrity involvement with BAYC would further strengthen its recognition among retail and institutional investors. This could lead to increased demand for its NFT collection, which in turn would push up its floor price.

The “Meta” factor

Jelmer Rotteveel, the co-founder of the NFT MoonwalkerFM collection, attached another bullish safety net to BAYC’s core valuation: the continued hype around Meta, rebranded from Facebook to support the media giant’s metaverse ambitions. social.

“With the emergence of Meta, we will enter a new medium of communication and business,” he told Cointelegraph, adding that NFTs would become an integral part of the metaverse industry, with users taking over. unique digital avatars, such as Bored Apes, to interact with. with each other digitally.

He added:

“I think people will take a closer look at the developments of NFT projects like BAYC and, as you have seen with cryptocurrency, they will step in one by one.”

Acheson noted that Facebook / Meta has pledged to spend around $ 10 billion on the development of the Metaverse, citing the advice of its CEO Mark Zuckerberg. declaration that they would look at decentralized metaverse applications.

“Believe it or not, investors are likely to think about getting ahead of these flows,” she added.

Wall Street will he imitate the NFTs?

As noted, BAYC’s net sales recently crossed the billion dollar mark, nearly 10% of what Apple earned in 2021. Meanwhile, the NFT industry, as a whole, has handled sales. worth $ 41 billion, which has become almost equal to global sales. year-round art sales, Chainalysis data show

Matt Hougan, Chief Investment Officer of Bitwise Asset Management, admitted that many of their clients were looking for exposure in the NFT space without needing to go through its intimidating technology.

In response, Bitwise launched a dedicated fund last month, which tracks its own Bitwise Blue-Chip NFT Collections Index – a basket of the ten largest market-capitalization-weighted NFT collections – and buys and owns works of art from BAYC, CryptoPunks, and other NFT projects. .

Related: The World Of NFT Gradually Fills The Gap Between Niche And Mainstream

The “Blue-Chip NFT Index Fund” is only available to institutional investors who invest at least $ 25,000 in the product.

Returns generated by Bitwise’s NFT fund since inception. Source: Bitwise Asset Management

Rebekah Keida, chief marketing officer of New York-based investment management firm XBTO, has promoted the prospects of including blue chip NFT projects like BAYC or CryptoPunks in funds on Wall Street.

Keida says this would open the floodgates for accredited investors to pour thousands if not millions of dollars into these digital projects.

“The opportunities offered by increased capital flows strengthen the legitimacy of major NFT projects while allowing investors a diversified bet on crypto,” she told Cointelegraph.

Luthra showed confidence in the ability of asset managers to keep up with Meta’s foray into the metaverse industry, which in turn would benefit NFT projects like BAYC, saying:

“If Meta believes the future lies in the metaverse and that’s where they invest their time and energy, it makes sense for asset managers to deploy funds to the industry. space is maturing and there are more opportunities available, I am confident we will see many more metaverse related funds appear to capitalize on the opportunity. ”

Meanwhile, Sami Chlagou, CEO of Cross the ages metaverse game, compared Meta’s potential involvement in the NFT space with “lighting a flash in the heads of investors who are much further back on it. concept”.

“Whether you think Meta’s decision is good or bad, the fact remains that when one of the largest social networking groups open to innovation and known to shake up our environment is talking about a topic, it opens doors and the desire to get involved.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move comes with risk, you should do your own research before making a decision.

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