ApeCoin continues to struggle despite returning 1600% within 24 hours of its launch on top cryptocurrency exchange platforms last month.
In part, the Bored Ape Yacht Club (BAYC) created token was subdued by large profit-taking from those gifted the coin for holding BAYC’s Non-Fungible Tokens (NFTs).
As stated in my previous article on ApeCoin, the 150 million tokens or 15% of the total supply given to NFT holders will continue to disrupt ApeCoin’s outlook in the near term as evident in recent weeks. While many of the retail investors that were gifted between 4 to 5 million coins are still holding, a substantial number have been selling at various stages and are expected to continue with the increase in the value of the coin.
Another noticeable reason for the inability of the token to replicate its early success was because of the general decline in capital inflow into the cryptocurrency space. Most institutional investors that have been sustaining the cryptocurrency market during the near-zero interest rates are now holding back ahead of the projected Federal Reserve aggressive interest rate increase.
Last week, David Folkerts-Landau and Peter Hooper, Deutsche Bank economists predicted that the Fed will hike interest rates by 50 basis points each in its next three meetings in a move to rein in the 7.9% inflation rate. This and some other fundamental issues, I predicted will plunge the U.S into an economic recession in late 2023 and 2024.
Normally, a hawkish stance is negative for the cryptocurrency space and that includes the new web3.0 token, ApeCoin. However, ApeCoin’s huge community and operational cash are some of the largest I have seen in the cryptocurrency space. That explains why the team was able to list the token on all the leading cryptocurrency platforms on the same day and increase global access to the coin.
This huge global access and strong team that includes, Alexis Ohanian, the co-founder of Reddit and Bored Ape Yacht Club (BAYC) with a successful track in the NFT space, could help ApeCoin down the line despite its like of utility. For now, I am a fan, not an investor.
