The Decline of BAYC: Why NFT Collectors Are Feeling the Heat
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Chapter 1: The Fall of the BAYC NFT
The current state of the Bored Ape Yacht Club (BAYC) NFTs resembles the tale of Humpty Dumpty—once high-flying, now in disarray. Despite efforts from Yuga Labs and its supporters, the situation seems dire.
For those who have been engaged with the NFT community on platforms like Twitter, terms such as "GMI" and "shilling" are likely familiar. Critics often label the NFT craze as a Ponzi scheme. While some individuals have struck it rich, others are left questioning their decisions. The ones who placed their faith in the NFT hype may find themselves holding assets that have drastically depreciated in value.
Many collectors are unable to access their digital items, as these NFTs are secured on a blockchain, beyond their control. The hype generated by celebrities such as Paris Hilton, Jimmy Fallon, and Justin Bieber—who infamously purchased an ape for $1.3 million—has contributed to this frenzy. Currently, a BAYC ape is trading for less than $100,000, a stark contrast to its previous all-time highs (ATH).
On April 30, a Bored Ape could be purchased at a floor price of 153.58 ETH, translating to approximately $435,680 at the peak of Ethereum's price. The NFT market, alongside the broader cryptocurrency landscape, is engulfed in issues like fraud and speculation.
Is This the Crypto Winter?
The ongoing crypto downturn has raised concerns, with significant figures like Do Kwon of Terra Luna facing scrutiny. In 2021, the Bank of England cautioned that Bitcoin could ultimately become "worthless." The finite nature of Bitcoin, capped at 21 million coins, has been a double-edged sword, attracting investors while also posing a risk of devaluation.
As of now, Bitcoin sits significantly below its ATH of $69,000, marking a 65% drop. Analysts suggest that the worst is yet to come, as many are still reeling from their investments.
The Bored Ape Yacht Club (BAYC) has gained notoriety as a premier NFT brand, boasting over $1 billion in cumulative sales. With the status symbol of owning a BAYC ape, many users display their NFTs as profile pictures on Twitter, a premium feature for paying users.
As of June 14, 2022, BAYC's market capitalization has plummeted from its peak, currently valued at around $87,000 per ape. Recent trends indicate a surge in transactions, with 26 apes sold in the last 24 hours—a 116% increase from the previous day.
The first video titled "I reviewed 100 upcoming NFTs and here's what I found" explores the current landscape of NFTs and highlights the challenges collectors face today.
NFT Security Concerns
Amid this turmoil, security concerns have arisen, especially regarding potential phishing attacks on NFT platforms. GordonGoner, co-founder of Yuga Labs, alerted followers about possible breaches involving Twitter insiders.
With Elon Musk poised to take ownership of Twitter, the implications for security in the NFT space have become a hot topic. The ongoing battle against phishing is a significant issue for BAYC, which has become a prime target for scammers. A notable incident involved actor Seth Green, who paid a $300,000 ransom to recover his BAYC ape, crucial for his upcoming TV show, "White Horse Tavern."
The NFT realm seems increasingly lawless, with scams and thefts becoming commonplace. Yuga Labs' popularity has inadvertently led to a rise in ape-themed frauds, including a breach that resulted in the loss of over 145 ETH.
Final Thoughts
Do you still feel like you missed the opportunity? Even Bill Gates advises against investing in cryptocurrencies unless you possess the wealth of someone like Elon Musk, highlighting the divide between crypto proponents and skeptics.
When the founders of BAYC were outed by Buzzfeed, some supporters expressed outrage, raising questions about why NFT enthusiasts prefer anonymity. Investing heavily in cryptocurrencies and NFTs can be reckless, and it’s vital to approach this volatile market with caution.
In conclusion, remember that financial gains don't come easily, whether from apes or any other investment.
Disclaimer: This is not financial advice.
Disclosure: I own an NFT collection and have engaged in trading on Opensea to better understand the NFT and AI art concepts.
Thank you for reading.
Sources:
- Bitcoin tumbles through $22,000 in crypto crash.
- Floor price of popular NFT collections collapse due to bear market.
- How four NFT novices created a billion-dollar ecosystem of cartoon apes.
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The second video titled "NFT Bro Makes A Million Dollar Mistake" dives into the pitfalls of NFT investments and the lessons learned from significant financial errors.