It would come as no surprise if, within the past 12-18 months, you have heard of NFTs, Non-Fungible Tokens. Virtual products that are created, usually using the same digital programming within cryptocurrencies like Bitcoin. They hold unique and one-of-a-kind information and codes, which means that they cannot be copied or re-made; only bought and sold.
Various artists have created their own NFT collections, with ‘Dope Ape Yacht Club’ existing as one of the more well-known collections, thanks to its celebrity purchasers, including Jimmy Fallon, Post Malone and Snoop Dogg, to name a few. The NFTs feature images of cartoon apes with different features, clothing accessories and backgrounds.
Canadian-born singer, Justin Bieber, was very vocal about his Bored Ape purchase, specifically Bored Ape #3001, back in January, after posting an image of his cartoon to his Instagram account. It was said that his Ape, compared to others which can feature patterns, sunglasses and hats, was more monotone, with its simply grey shirt and dark blue background. It was ranked 9,810th most rare on Bored Ape Yacht Club, based on its simple characteristics and accessories.
Bieber bought the monkey for 500 ETH (A type of cryptocurrency) which, at the time, was worth $1.3million, (£1.1million) also known as the original floor price.
However, in the past few weeks, Bieber has faced some difficult financial news, after the cryptocurrency market crashed, causing the NFT market to slowly decrease alongside it, as trades and purchases hit an all-time-low.
The songwriter’s Ape is not valued at the new floor price of $69,000 (£58,000), which is a 95% drop in value in under 12 months since his original purchase in January. In February, he also purchased a ‘BAYC’ NFT for $444,000 (£376,000) which has now also dropped in value to a new floor price of $60,000. (£50,000)
The Cryptocurrency crash has seen one Ethereum now being valued at $1,200; (£1,010) a massive drop from its peak in November 2021 which saw its value reach $4,400. (£3,700)
The huge drop in value of Bieber’s NFT looks to be the result of a collapse in FTX; a cryptocurrency exchange.
FTX creator, Sam Bankman-Fried, faced a liquidity crisis after users discovered that his training firm (Alameda) had most of its holdings in FTT; a coin invented by FTX. This means that it was not safe, nor stable, to be used and traded.
Bankman-Fried launched the crypto trading firm in 2017, which, shortly after, saw the creation of the FTX crypto exchange 2 years later in 2019. Due to the lack of a stable and reliable currency in FTX, their rival, ‘Binance’, then withdrew roughly $530million (£448million) worth of FTT, which subsequently motivated other investors to also withdraw billions of dollars worth of assets from FTX.
Binance did, temporarily, make a bid to buy the deteriorating FTX, but this announcement was quickly cancelled after due diligence concerns arose. This cause FTX to file for bankruptcy.
The Bored Ape Collection is now down to roughly 58.2 ETH, around $69,800 (£59,000), which demonstrates a 33% dip in the Bored Ape Value within October and November this year. From the crippling downfall of the NFTs, Ape owners have been seen to have panic-sold them in hopes of retrieving any left-over amount of their purchase price as possible while their values continue to drop.
