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Experts called the reasons for the recent growth of the price of a young token and shared their opinion on its prospects
The young cryptocurrency ApeCoin of the NFT collector community is gaining popularity among well-known brands. Thanks to well-known NFT projects such as Yuga Labs’ Bored Ape Yach Club (BAYC), many firms are starting to accept the ARE token for payment along with bitcoin and other leading coins.
Iconic Italian fashion house Gucci has announced that ARE will be available as a payment option in select stores. And Swiss luxury watch manufacturer Tag Heuer has announced that it is ready to accept payment in ApeCoin for its Connected E4 NFT watch.
In most cases, the adoption of the token by companies occurs against the background of their cooperation with NFT projects. Tag Heuer first released a line of NFT watches inspired by BAYC, while Gucci announced plans to launch a metaverse store for owners of non-fungible tokens from the most famous collections.
The Bored Ape Yach Club project first gained notoriety during the 2021 crypto boom. The hype surrounding the NFT collection has attracted the attention of celebrities such as Madonna, Paris Hilton, Steve Aoki and actor Seth Green, who even made his NFT the subject of a television series.
BAYC developers launched the ApeCoin cryptocurrency in March this year. The token was created for internal use in the growing APE ecosystem, which is managed by the decentralized autonomous organization ApeCoin DAO.
ARE is used not only as a governance token, but also for the purchase of goods and services. The total number of tokens is limited – in just 4 years, 1 billion ARE will be created.
The cost of Apecoin and the NFTs themselves from the BAYC collection that supports it dipped in early summer, just like the entire cryptocurrency market. The token has largely declined in price from its all-time high of $26.7 at the end of April. In June, when the leading cryptocurrencies fell to local lows, the ARE coin fell to $3.1.
As of August 4, 2022, ApeCoin is ranked 33rd by capitalization ($2.3 billion) among all cryptocurrencies with a daily trading volume of $595 million. The price of APE is currently hovering around $7.51, showing a weekly increase of more than 10%.
Experts told RBC-Crypto about what affects the price of ApeCoin and shared their opinion on the prospects of the token.
“Waiting for a collapse”
This token is one of the newest, in addition, decentralized, reminded the head of the analytical department of AMarkets Artem Deev. According to him, such assets tend to strong and rapid, but short-term growth, and it is extremely difficult to predict their movement.
The expert explained that over the past 24 hours, the ApeCoin coin has grown in price due to reports that the token will be accepted as a means of payment by well-known brands and due to the popularity of the BAYC NFT collection.
However, Deev warned that now the entire crypto market is reacting very strongly to the overall economic and financial picture in the world. The growth of regulators’ rates and the beginning of the global recession will definitely cause an outflow of investors who will choose protective assets and avoid risk, the specialist believes.
“In such conditions, it is extremely difficult to say for sure that the token will grow. Surely, after the release of new data indicating a slowdown in the global economy, the crypto market will decline on a wide front, and this will affect ApeCoin as well,” the expert suggests.
In his opinion, if you buy this cryptocurrency, then for a short time, while its popularity is growing. Deev clarified that then it is worth carefully exiting the asset, without waiting for a collapse.
Lack of benefit
Despite a noticeable news background and a positive trend lately, today ApeCoin only managed to return to the price level of the March ICO, according to Bestchange.ru Senior Analyst Nikita Zuborev. He believes that the prospects in the coming months may be good, but there is no certainty even in updating the historical maximum.
In fact, ApeCoin has an indirect relationship with the success of the NFT collection of the APE ecosystem, but is not directly an asset that has a high investment attractiveness, the expert explained. He admitted that most likely the trends in the popularity of the NFT collection will have a high degree of correlation with the trend in the demand for the utility token ApeCoin. But the token itself will not be able to maintain high demand and sufficient liquidity to hold the position, Zuborev is sure.
According to the analyst, one can consider the medium-term purchase of this asset as one of the risky strategies. At the same time, while maintaining hope for new news stories that support the high citation of the APE ecosystem in the information field. This has a positive effect on the price of ApeCoin.
However, one cannot believe in the long-term success of this token, Zuborev admitted. He clarified that the reason for such distrust is the almost complete lack of applied use of this cryptocurrency and a limited circle of investors interested in this class of tokens.
Desire to “hype”
The fact that well-known companies have released news about plans to start accepting this token is the brand’s desire to “hype,” believes exmo.com development director Maria Stankevich. According to her, most likely, cooperation agreements were planned several months ago, since large brands develop such events in advance.
The expert clarified that the token has now dipped in price relative to spring highs. But APE may well have some quick rallies, but keep in mind that the situation in the NFT market is not improving, the expert warned. She pointed out that in June, NFT sales brought in just over $1 billion across all trading floors, while in July they brought in about $800 million, according to Dune. The chances of the APE recovering to its April values are very small, Stankevich believes.
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