Distributed Ledger: Why Bored Ape cartoon monkey NFTs crashed to a 2-year low this week

That piece of art was a Bored Ape, a cartoon monkey photo that belongs to a larger collection of 10,000 unique avatars called The Bored Ape Yacht Club (BAYC). The collection launched in 2021, at the pinnacle of the crypto bull market. Celebrities who jumped in on purchasing a Bored Ape included Jimmy Fallon, Stephen Curry, Tom Brady, Mark Cuban, and Gwyneth Paltrow, Snoop Dogg and many others.

But recent data from OpenSea, an online marketplace for NFTs, shows that the BAYC has crashed to a two-year low. The floor price, which determines the lowest priced piece in a collection, has fallen to 31 ETH, or around $59,000, its lowest since November 2021. This led to many wondering how this happened, and what’s next.

Read below to find out more, and feel free to find me on Twitter to share your insights.

The fall of BAYC, explained

I spoke to Sara Gherghelas, a blockchain analyst at DappRadar, a platform that tracks and analyzes decentralized apps, to ask why the BAYC has taken a significant hit this year. Gherghelas attributes it to multiple factors.

In May, the BAYC launched on Blend, a peer-to-peer lending platform that lets users borrow NFTs and repay them with smaller down payments. Around the same time, in what Gherghelas calls an “unfortunate coincidence” there was a controversy surrounding the Yuga Labs ecosystem.

Yuga Labs, which owns the BAYC along with other crypto and NFT projects, introduced ApeCoin in 2022 as a crypto token to enhance gaming and commerce within the BAYC ecosystem. In June, ApeCoin’s decentralized autonomous organization came under fire for its leadership board reportedly receiving high monthly payments of up to $75,000 a month, according to some reports. The compensation led community members to sour on the entire BAYC ecosystem.

Another factor contributing to the fall in prices was that the larger NFT market has cooled in recent months due to broader market conditions and a so called crypto winter, and a general decline in enthusiasm for digital art.

“While the market has faced a downturn, failing to surpass $1 billion trading volume mark for the second time since December 2022, the NFT trading volume for June increased to $888 million compared to the previous month’s $675 million,” said Gherghelas. “However, it’s crucial to distinguish between trading volume and market hype. A lower trading volume does not necessarily indicate a decline in market interest or activity. The total sales count for June reached 4.26 million, suggesting a shift in traders’ focus rather than a loss of interest.”

Yuga Labs doesn’t seem bothered by the change in floor price.

“We’re not interested in monitoring the purchase or sale of our collections on marketplaces because it has no impact on what we’re doing at Yuga,” said a Yuga Labs spokesperson in an email to MarketWatch. “Our focus continues to be building great experiences for our communities, and we’re really excited for everything we have in the pipeline.”

BlackRock CEO Larry Fink talks bitcoin

In other crypto news, earlier this week, BlackRock refiled for a bitcoin ETF after the U.S. Securities and Exchange Commission reportedly deemed its previous filing inadequate. A couple of days later, on Wednesday, BlackRock
BLK,
-1.76%
CEO Larry Fink compared bitcoin to digitizing gold in an interview with FOX Business.

“I was skeptical because the early users were — it was heavily used for, let’s say, illicit activities,” said Fink. Later in the interview, Fink said “I think, as it became more accessible — and, also, I do believe the role of crypto is — it is digitizing gold in many ways.”

You can read the full story by MarketWatch’s Steve Goldstein here.

Crypto in a snap

Bitcoin
BTCUSD,
-0.60%
is up 1.62% in the past week, trading at $30,257 on Thursday afternoon, according to CoinDesk data. Ether
ETHUSD,
-1.47%
is up 3.86% in the past week, trading at $1885.18 on Thursday afternoon, according to CoinDesk data.

Must-reads

Wall Street Spots Blockchain Opportunities as Crypto Stumbles (Bloomberg)

AI Crypto Trading Bots Are the New ‘Edge’ – For Now (CoinDesk)

How Tom Brady’s Crypto Ambitions Collided With Reality (The New York Times)