Bored Apes Are A Bad Investment
By Beluga Research August 31, 2023
- Bored Apes, a type of NFT, are considered foolish and investors suing Sotheby's for buying them at auction them are suckers
- NFTs first gained attention through CryptoKitties in 2017, and Bored Apes are just another NFT project in an ocean of them
- Bored Apes lack utility and their value is speculative, which means they were always risky investments
- Market saturation, lack of intrinsic value, and the fact it is just a fucking picture of an ape are reasons why investors should pull their big pants on and accept they bought shit
Bored Apes, a type of NFT, are considered foolish and investors suing Sotheby's for buying them at auction are stupid suckers. Bored Apes, a type of NFT, should have always been considered foolish and learn the essential facts surrounding this phenomenon. Before diving into the specifics, let's first establish a general understanding of NFTs.
In 2021, Sotheby's conducted an auction featuring 101 Bored Ape Yacht Club (BAYC) NFTs, a collection of unique and highly sought-after digital artworks The auction marked a significant moment in the NFT space and demonstrated the growing recognition of digital art as a valuable artistic and collectible medium. The Bored Ape Yacht Club is a community-driven project that mints distinctive NFTs representing cartoonish ape characters, each possessing distinctive traits and attributes. However, the investors in this collection are now suing Sotheby's for running a "deceptive auction" . Of course, maybe the investors should have read more into the prospects of buying cartoon apes for hundreds of thousands of dollars.
A Brief History
Non-fungible tokens represent unique items or assets that are indivisible and cannot be exchanged on a one-to-one basis like cryptocurrencies such as Bitcoin or Ethereum. Each NFT holds distinct characteristics, making it different from any other token in existence. This uniqueness is achieved through the use of blockchain technology, which provides a transparent and immutable record of ownership.
NFTs gained widespread attention in 2017 when the game CryptoKitties took the Ethereum network by storm. These digital collectible cats could be bought, sold, and bred, creating a frenzy of trading activity. Since then, the NFT space has expanded rapidly, with various projects exploring the potential of unique digital assets. Among these projects, Bored Apes and similar collections have attracted significant attention, but their value proposition has come under scrutiny.
Why Bored Apes Are Stupid: Everything to Know
Bored Apes, like many other NFT projects, offer a collection of unique digital artworks, each represented by a distinct token on the blockchain. These artworks often feature cartoonish ape characters with different traits and accessories. While some argue that Bored Apes have become a status symbol and a way to showcase wealth, the underlying question remains: Do they have any intrinsic value?
Some Bored Apes have dropped as low as 88% from highs. Source: Yahoo
One of the primary criticisms of Bored Apes is their lack of utility. Unlike cryptocurrencies that can be used for various purposes, such as facilitating transactions or executing smart contracts, Bored Apes primarily serve as digital collectibles. While the concept of collectibles is not new, the digital nature of Bored Apes raises questions about their long-term value. Unlike physical collectibles, which can be displayed or enjoyed outside of the digital realm, Bored Apes are limited to their existence within the online space.
Furthermore, the value of Bored Apes and similar NFTs is highly speculative and driven by market demand. The price of these digital assets can fluctuate wildly, often detached from any fundamental factors. This speculative nature makes them prone to volatile price swings, exposing investors to significant risks. Additionally, the market for NFTs is still relatively nascent, and it remains to be seen whether the current hype surrounding these digital collectibles will sustain over the long term.
Another aspect that raises concerns about Bored Apes is the potential for oversaturation in the market. As more and more similar projects emerge, the uniqueness and scarcity of individual NFTs diminish. This oversupply of digital collectibles could erode their value and make it challenging for investors to realize a return on their investment.
To understand the concept of Bored Apes, it's essential to grasp the basics of non-fungible tokens (NFTs) and their relationship with cryptocurrencies. NFTs are unique digital assets that are stored on a blockchain, typically the Ethereum network. Unlike cryptocurrencies such as bitcoin or ether, which are fungible and can be exchanged on a one-to-one basis, NFTs represent individual items or collectibles that cannot be interchanged. Bored apes are a specific type of NFT that gained popularity as digital collectible apes with different attributes and characteristics.
The Bored Ape Yacht Club is a collection of 10,000 NFTs. Source: Universal Music
While NFTs, including Bored Apes, have gained attention for their uniqueness, their value proposition as an investment is highly debatable. Unlike cryptocurrencies that derive value from their utility, scarcity and potential for adoption, Bored Apes primarily rely on speculative demand. Their value is driven by the willingness of collectors to pay exorbitant prices for the perceived exclusivity and uniqueness of owning a particular ape picture.
One of the primary concerns with Bored Apes is their lack of intrinsic value. Unlike cryptocurrencies that can be used for various purposes such as decentralized finance, remittances, or smart contracts, bored apes serve primarily as digital collectibles. While some argue that the value of collectibles is subjective and can appreciate over time, it is important to note that the market for bored apes is highly speculative and driven by hype rather than underlying utility.
Bored Apes have dropped significantly since their 2021 peak. Source: CoinGecko
Furthermore, the sustainability of the Bored Ape trend is pretty questionable. The current frenzy surrounding these digital collectibles may not be sustainable in the long term, as it heavily relies on the continued interest and demand from a niche group of collectors. As with any speculative investment, there is a risk of a bubble bursting, leading to a significant decline in value. Investors should exercise caution and consider the long-term viability of bored apes as an investment.
- Rarity - Bored Apes are marketed as limited edition collectibles, with each ape possessing unique attributes. This rarity factor can create a sense of exclusivity.
- Social Status - Owning a Bored Ape NFT may confer a certain social status within the crypto community. Some individuals view it as a status symbol or a way to showcase wealth.
- Potential for Profit - Like other NFTs, Bored Apes can be bought and sold on various online marketplaces.
- Speculative Nature - The primary concern with Bored Apes is their speculative nature. The current market value of these NFTs is primarily driven by hype and speculation.
- Market Saturation - The market for Bored Apes has become increasingly saturated with similar digital collectibles. As more projects emerge, the demand for any specific NFT may diminish, potentially resulting in a depreciation of value.
- Lack of Utility - Bored Apes, like many other NFTs, often lack inherent utility beyond their aesthetic appeal. While some argue that owning a Bored Ape grants access to exclusive events or communities, the long-term sustainability of such perks remains uncertain.
- Environmental Concerns - The creation and trading of Bored Apes, like other NFTs, rely on blockchain technology that consumes a significant amount of energy. This energy consumption has raised concerns regarding the environmental impact of NFTs.
- Potential Bubble - The rapid rise in the prices of Bored Apes and other NFTs has led some to question whether we are in a speculative bubble. If the bubble bursts, the value of Bored Apes could plummet, leaving investors at a loss.