No cryptocurrency is doing particularly well these days, but holders of ApeCoin (CRYPTO: APE) have suffered less than most. Bolstered by association with a popular non-fungible token (NFT) marketplace frequented by celebrities, ApeCoin's U.S. dollar value hasn't cratered like so many of its peers.
One of those peers is Bitcoin (CRYPTO: BTC) the once-unavoidable digital asset that has fallen on hard times. Perhaps the popular and resilient ApeCoin can rise to the levels of popularity still enjoyed by Bitcoin, in spite of the latter's recent decline.
Coins of the realm
Of the two, Bitcoin is by far the more established and familiar to the general public. In the eyes of many, it's the cryptocurrency, and it's indisputably a bellwether for its asset class. Very often, absent market-shaking news of their own, the prices of many other digital coins and tokens will move more or less in concert with Bitcoin.
Almost literally, ApeCoin is a far different animal. Compared to Bitcoin, it's a baby, having been launched only this past March (Bitcoin came to life in 2009). Moreover, in contrast to Bitcoin with its native blockchain, ApeCoin is an Ethereum-based token.
Although it was not developed by Yuga Labs -- the entity that was responsible for bringing to life the NFT marketplace the Bored Ape Yacht Club (BAYC) -- ApeCoin has been adopted as the BAYC's native token. When it dropped, a chunk of its allotment was given to existing Bored Ape NFT holders, and along with other ApeCoin holders, they share governance privileges in the token's developer, ApeCoin DAO.
Yuga Labs is busy expanding the Bored Ape world; in late April it launched Otherside, a metaverse populated by the virtual creatures that give the Club its name. This metaverse is in its infancy -- like ApeCoin -- but already trading in plots of its virtual land has been white-hot. The coin of Otherside's realm is, of course, ApeCoin; not coincidentally the token peaked in price just before the metaverse's launch.
The prices of Bitcoin and ApeCoin reflect their ages and positions on the cryptocurrency food chain. As the first and still, for many, the leading coin, Bitcoin is still very expensive despite its drastic drop in recent months -- it presently trades for just over $20,300 a piece. Such a price could get you a lot of trendy but relatively new and untested ApeCoin, as it currently costs less than $5 per token.
Is the trend your friend?
So what we have here are two very different digital assets. Bitcoin is a nearly unavoidable investment for anyone who believes crypto has any kind of a future. Its utility is famously -- some might say notoriously -- limited, but that's generally not why people buy it. Instead, many consider it a store of value, and the root of what one day will be a widespread, thriving, digital financial ecosystem.
ApeCoin, meanwhile, is a token connected to the coolest thing going in the NFT world right now. Note that "cool" is a relative concept here, given the decline in NFT prices due largely to the broader crypto slump. Regardless, BAYC still has plenty of cachet, with some of your favorite celebrities making the list of Bored Ape NFT holders (NBA star Steph Curry and singing sensation Madonna, to name but two).
There is power and value in popularity and, although the two cryptocurrencies have their fans, this is where Bitcoin should remain the incumbent. Nearly anyone wanting to roll the dice on cryptocurrencies at least considers Bitcoin, one reason for its five-digit price even after the recent meltdown.
Meanwhile, a major part of ApeCoin's appeal is that it's currently hot among the famous these days. Its utility is even more limited than the clunky Bitcoin, so it's very dependent on that popularity. But as we all know, trends have a way of melting away quickly as celebrities (and the rest of the world) move on to the Next Cool Thing.
I've never been a staunch believer in Bitcoin. Still, I feel it's not going to be dislodged, or even rivaled by any newcomer -- least of all a trendy one with even more limited utility. So I seriously doubt ApeCoin can become the next Bitcoin, at least anytime soon.
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Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Source: The Motley Fool