ApeCoin (APE), the new cryptocurrency that was recently launched by Yuga Labs, aims to be the bedrock of the Otherside Metaverse and recently the toke
ApeCoin (APE), the new cryptocurrency that was recently launched by Yuga Labs, aims to be the bedrock of the Otherside Metaverse and recently the token has experienced massive volatility leading into and after its digital land sale. APE’s price dropped from $26 at the peak on Apr. 28 to $14 on May. 2 — more than 45% drop within a few days of the mint. The price has now dropped to the $6 range.
Given the current volatility, investors will be wondering if ApeCoin price will ever recover to its previous trading range. Let’s first take a look at the historic price trend, particularly what happened on the Otherdeed mint day; then take a deeper dive into the amount of APE that will be locked and released in the next three years. This will provide a better understanding of the supply and demand dynamics that could affect the price going forward.
ApeCoin surged after the Otherdeed announcement
In the first couple of days since APE’s listing on March 17, 2022, the price jumped from roughly $7 to $17 at the peak ; an increase of 143%! The price had since fluctuated between $10 to $15 until rumors began circulating of the Otherside Metaverse land sale.
The chart above shows APE made a sharp move up of almost 24% within a day from $13.16 to $16.30. When the Otherdeed rumours surfaced on Twitter on April 20, APE catapulted to $26 on April 28 after the sale was officially confirmed by OthersideMeta two days prior.
The price of Yuga Lab’s Bored Ape Yacht Club (BAYC) and the Mutant Ape Yacht Club (MAYC) NFT also followed a similar pattern on April 20. MAYC reached all time high at 43 ETH on April 26 which was the day the sale was confirmed and BAYC started to bounce back from its 105 ETH low to a new all time high at 168 ETH on May 1.
Chaos ensued as Yuga confused users during the Otherdeed sale
Otherdeed was seen as an opportunity for new investors who have been priced out of BAYC, MAYC and BAKC to become part of the Ape community.
The bullish conviction toward APE was driven by the fact that it is the only currency in the Otherside Metaverse and the land sale in the secondary market would also be traded in APE in addition to ETH.
Investors who believed in Yuga Labs and the idea behind the Otherside Metaverse rushed to acquire APE in preparation for the mint at the price of 305 APE per plot. The increasing demand for APE as the minting date approached was broadly expected and the increase in price pre-mint was also foreseeable.
What came as a shock later on is how chaotic the whole process of minting Otherdeeds was. APE’s price plunged from $24 to $14 on May 2 which reflected a more than 40% decrease in two days! The immediate price drop to $20 on the day of the mint could be explained by the sudden decrease in demand for APE after the mint started.
A further 30% drop in the following two days is a clear reflection of investors’ loss of confidence in the project after the mint debacle. BAYC and MAYC price also reflected the same sentiment by falling more than the market value of the airdropped Otherdeed.
Despite efforts made by the Otherside team to verify new investors through a KYC (know-your-customer) process before the mint and to offer the sale at a fixed price, these measures were not enough to prevent a gas war. Information was not clear and sometimes plain wrong prior to the mint and a significant amount of money has been mis-spent and burnt on gas as a result of the poor communication by Yuga Labs.
What follows are some of the major issues encountered by investors on the day of the mint.
What happened to the Dutch Auction?
On April 26, OthersideMeta tweeted that the mint would be a Dutch auction but three days later they changed their mind and said “Dutch auctions are actually bullshit,” a complete pivot and a brutal slap in the face to investors.
A Dutch auction would have been an effective way to mitigate gas wars due to its unique design of a very high start price and a decreasing price over time. Investors could have chosen to mint at the price they could afford at different times, avoiding everyone minting at the same time, at the same price, and creating a gas war.
Mint will be Dutch auction style, so the ApeCoin price will decline over time. The starting price of the Dutch auction will be announced later this week.
— OthersideMeta (@OthersideMeta) April 25, 2022
The delayed mint created additional problems
After the team delayed the mint date, APE price experienced some of the largest hourly downside re-pricings.
The below hourly chart shows APE increased slightly in the first three hours after the original planned mint time, then dropped from $22 all the way to $18 by the time the actual mint took place at 9 p.m. EST.
It is hard to say if the delay exacerbated the downward pressure, but the price fluctuation in APE significantly increased the risks taken by investors, especially…
cointelegraph.com