What Makes The Bored Ape Yacht Club So Attractive On Wall Street?
Within months of its launch in April 2021, the Bored Ape Yacht Club (BAYC) has become one of the main reasons Wall Street is keeping an eye on the emerging NFT market, thanks to more $ 1 billion in sales.
The famous monkey – Bored Ape Yacht Club
BAYC is a collection of 10,000 cartoon images of monkeys in human form with stylish clothes and “difficult” facial expressions. Every monkey is practically an image file of no value. However, they have raked in huge sums of money from some of the world’s most famous celebrities.
For example, Jimmy Fallon, a popular American television host, bought a picture of Bored Ape in a plaid T-shirt and heart-shaped sunglasses for nearly $ 220,000 last November. And recently, Oscar-winning rapper Eminem paid nearly $ 462,000 for a monkey that looked like himself.
Eminem bored monkey or BAYC # 9055. Source: The Guardian
Meanwhile, one of the rarest bored apes, with its yellow fur, sold for $ 3.4 million in an online auction organized by Sotheby’s in October, breaking the record for a rare monkey different from the laser eye for 2.9 Million dollars was sold to Sandbox.
What are the attractive features of BAYC?
The BAYC Collection derives its value from NFT, a digital proof of ownership that is recorded on a public blockchain. It is similar to Bitcoin, but each “coin” is indivisible and unique.
Meanwhile, most of the NFT projects, including BAYC, are built using the Ethereum blockchain, which is valued in ETH tokens.
But rarity isn’t the only reason people pay millions for Bored Ape. Not only do they have a unique avatar, but they can also join an exclusive member club to help them out join into the “elite”, which gives them status and more lucrative opportunities.
Evan Luthra, CEO and founder of EL Group International and member of the exclusive BAYC club, spoke about the attraction of this club. The 26-year-old investor calls membership a very powerful weapon for Wall Street.
“A celebrity joins this club almost every day.”
Bored Ape Collections also give their owners access to private message boards on Discord and access to other NFTs.
Minimum price from BAYC
These NFTs all have a certain resale value known as the “reserve price” that reflects the lowest bid that a person can open for collection.
Currently, the BAYC minimum price is 72 ETH, or about $ 225,000, up more than 400% from the mid-August low.
Basic price BAYC | Source: Coinecko
Noelle Acheson, Head of Market Intelligence at Genesis Trading, invested in BAYC because the project has more partnerships than CryptoPunks, one of the popular NFT collections that existed before that.
The partnership includes Adidas items inspired by BAYC, a deal with a talent agency, a potential Bored Ape band, and other properties popping up around the monkeys.
“This is why the concept of floor prices, which was created with the aim of attracting institutional investors to participate in NFTs and using them as collateral for loans, is growing.”
“The floor price and upside potential of an asset now also depend on what the NFT can be used for.”
With the continued participation of celebrities, BAYC is widely recognized by private and institutional investors. This could increase the demand for his NFT collection and thus drive the reserve price up.
The “meta” factor
According to Jelmer Rotteveel, co-founder of the NFT MoonwalkerFM collection, the ongoing hype surrounding Meta, which is being renamed by Facebook, is also one of the factors that could make BAYC grow strongly.
With the advent of Meta, the market is shaping new communication and business channels and NFT is becoming an integral part of the Metaverse space. Users can use unique digital avatars like Bored Ape to interact with each other.
Rotteveel added that they will take a closer look at the development of NFT projects like BAYC. Similar to cryptocurrencies, they will evolve step by step.
Facebook / Meta has pledged to spend approximately $ 10 billion on developing the metaverse, and the CEO, Mark Zuckerberg, to say they will be looking at decentralized metaverse applications.
Will Wall Street Get Into NFT?
BAYC’s net sales recently passed the $ 1 billion mark, nearly 10% of what Apple made in 2021. The NFT sector now has total sales of $ 41 billion, roughly equivalent to global art sales last year.
Matt Hougan, chief investment officer at Bitwise Asset Management, admits that many of his clients want to get into the NFT space without facing its difficult technology.
In response, Bitwise gave debut dedicated fund last month, tracks its own Bitwise blue-chip NFT Collection Index, which spans the ten largest NFT collections by market capitalization, and buys and holds art from BAYC, CryptoPunks, and other NFT projects.
The “Blue-Chip NFT Index Fund” is only open to institutions that invest at least 25,000 US dollars in the product.
Bitwise NFT fund returns since inception. Source: Bitwise Asset Management
Rebekah Keida, Chief Marketing Officer of the New York investment management company XBTO, also supports the initiative to bring blue-chip NFT projects such as BAYC or CryptoPunks into Wall Street funds, thereby helping to close the door for accredited investors open even thousands to invest millions of dollars in these digital projects.
The opportunities created by increased investment flows will increase the legitimacy of top NFT projects while also allowing investors to bet on the crypto market, she said.
Luthra expressed his confidence in the skills of asset managers when Meta entered the Metaverse space. If Meta believes the future lies in the Metaverse and invests their time and effort there, wealth managers are likely to flock to this area. As the space matures and offers more investment opportunities, more Metaverse-related funds should emerge.
Meanwhile, the CEO of the new generation Cross Metaverse game, Sami Chlagou, confirmed that Meta’s foray into the Metaverse has attracted many new investors who have never been in the field.
Whether Meta’s decision is good or bad, with the influence of the world’s largest social network, it will still open new doors to investors looking to participate in the market.
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