APE +34%. Time to go ape? (Patreon)

ApeCoin (APE) is the USD4.5billion market cap token that’s leading the charge into the metaverse. As mentioned in on previous crypto review, APE is on my watchlist and indeed it has just risen over 30% over the past few days. Meanwhile the overall crypto market continues to trade sideways, so coins with fundamental catalysts are clearly outperforming. Let’s breakdown the drivers and what the market is pricing in:

APE was originally airdropped on May 17th to all holders of BAYC and MAYC NFTs. What does this mean?

- Airdrop means the same as a dividend. But it is more similar to a special dividend given that the date and the amount of the airdrop is never known beforehand. There are always speculations, just like in the equity world, but the rumor are only verified when the securities go ex

- The securities we are talking about here are of course the Bored Ape Yacht Club NFTs, including the original BAYC line and the MAYC line. So basically as long as you own a BAYC or MAYC NFT, you received APE as a form of special dividend

- How much was airdropped? Well given that APE traded around USD10 on the first day, many BAYC NFT holders received around USD70,000 – USD100,000 of APEcoin tokens.

- These are unrestricted and highly liquid tokens, and many cashed out on the first day.

But for those who has held on, they are being rewarded for their patience now as APE has reached all-time-highs this week based on the rumor that the BAYC’s future metaverse LAND NFT sale will be priced in APE. So let’s break that down

The company behind BAYC is called Yugalabs. They are the masterminds behind BAYC, MAYC, and APE. Despite for only being around for 1 year, they have recently just raised $450mn from a round lead by A16Z at a valuation of $4billion based on a single IP – Bored Apes. However, this single IP now commands a total valuation of something like $6billion based on latest prices. (BAYC – 1bn, MAYC – 500mn, BAKC – 100mn, APE token – 4.5bn). The next plan on Yugalabs roadmap is to build an entire metaverse around the NFT identities that they created. And the first part of that is to release the “lands” that makes up this metaverse. The “lands” will of course be in the format of NFTs.

And as rumor has it, the “lands” will again be airdropped to MAYC and BAYC holders in the form of a special dividend. But furthermore, the public will also have the chance to buy the “lands”. A simple calculation shows that, there will be around 170k number of “lands” that will be for public purchase. Based on comparable land prices of 2eth (very conservative), Yugalabs stands to raise more than USD1bn dollars through this “lands” NFT mint event.

Now, let’s tie it all back to the APE token. If the 170k of public “land” is completely subscribed for (which most likely will). And IF this subscription is priced in APE like the rumour suggests, then around $1bn worth of APE token will be needed to pay for the “land”. As mentioned at the start, APE token’s total market cap is only $4.5bn, so around 22% of the token’s free float will be turned over for this single event. The demand is likely to outstrip the supply as holders are unwilling to offload their APE tokens, which is causing a squeeze in the market.

Land mock up from Yugalabs’ deck

Why now? Well, the event has been expected for a while with no date planned. But April 23rd is the 1 year anniversary of Yugalabs. So the expectation is that this event will drop this Saturday. Again, complete speculation at this point, but every single Yugalabs project has made its holders money so the market is eagerly awaiting this latest development in the ecosystem

Disclaimer The content of the video is solely for information purpose and do not constitute investment advice