Fact or Fiction? Has ApeCoin (APE) Really Dropped 80% Since Launch?

ApeCoin (MONKEY), the governance token of the well-known Bored Ape Yacht Club (BAYC) NFT project was handed over to owners of BAYC and Mutant Ape Yacht Club (MAYC) on March 17 at 8:30 a.m. EST and just 8 hours after open-air APE market, it has already jumped to the 110th most traded token ranked by CoinGecko, totaling $900 million in trading volume across all platforms tracked.

Unsurprisingly, there were some volatile price movements minutes after the airdrop and headlines show that the price of APE has fallen by 80% since its launch. This raises the question of whether the regular BAYC and MAYC owner could have actually sold APE for $40 instead of the $14 it was trading for at the time of publication.

Let’s take a look at the price of APE minutes after the airdrop was claimed and the token listed on Binance, FTX, Gate and SushiSwap to assess the magnitude of the price differences during the initial price discovery periods.

ApeCoin spot 1-minute chart. Source: FTX

The spot price chart above shows that on the one minute FTX chart, APE traded to $40 in the second minute, but the perpetual price chart below shows it only rose to $15 in the first minute at its high.

ApeCoin 1 minute perpetual chart. Source: FTX

Binance shows a high of $28 at the minute of the airdrop of the one-minute chart, while Gate shows an incredibly high $214 at the same minute.

APE/USDT 1-minute chart. Source: BinanceAPE/USDT 1-minute chart. Source: Gate

While the price of newly listed tokens is often volatile during the initial price discovery periods and it is difficult to know whether trades actually occurred at these levels, the volumes on these minute candles can provide a good indication of what the true price of APE was after the air raid.

Binance’s trading volume is the highest among the three platforms used in this article and the reader should know that APE is traded on other platforms as well. In the first 5 minutes, Binance’s total trading volume was $42 million while FTX perpetual’s trading volume is $18 million in total and spot volume is $6 million. Gate has only $1,665 trading volume on the candle showing the highest price of $214 and a total of only $43,000 volume in the first 5 minutes.

So it can be clearly seen that the more reliable price of APE is minutes after Binance’s airdrop which is about $28 and happened at the minute of the airdrop. It is not uncommon to see a big drop in price in the newly launched tokens in the early trading hours, as happened with many similar tokens. The question is whether an ordinary non-tech savvy owner could have sold the token in the first five minutes to avoid such a drop. The answer is almost certainly no.

First, the gas price before hitting APE shot up to 10 times (or even more) from the normal price right after the airdrop. Unless one is willing to take big risks by raising the gas price to put the APE above everyone else (and remember that the APE price is probably nowhere to be found right now), it is very difficult to get APE even in a minute. claim.

Second, once APE is in the recipient’s Ethereum wallet, it must be transferred to centralized exchanges (CEXs) such as Binance and FTX to be sold. This will also take some time, depending on the traffic on the chain at the time. The fastest way would be to use a decentralized exchange (DEX) by simply plugging in the Ethereum wallet and exchanging APE for another token.

However, an interesting observation is that APE’s liquidity in the DEX is not as great as in CEX. The TVL at the time of writing on Uniswap is relatively small for APE-USDC and APE-DAI pools; and the liquidity on SushiSwap is very low – the total value locked in (TVL) in the APE-USDT pool is only $67,000.

APE liquidity pool as of March 17. Source: UniswapAPE/USDT liquidity pool as of March 17. Source: SushiSwap

BAYC owners can claim approximately 10,000 APE per NFT and MAYC owners can claim approximately 2,000 APE per NFT. This means that only 80 BAYC owners can trade the full airdrop for the price of $28, given APE-USDC’s $45 million TVL on Uniswap.

No BAYC owner can exchange the full airdrop on SushiSwap for USDT, as the $67,000 TVL cannot cover 10,000 APE swaps per BAYC or the 2,000 APE per MAYC at the $28 price.

Given the lack of liquidity in the DEX and the time it takes to transfer APE to a CEX like Binance, it is nearly impossible for a regular owner to cash out at the top in the first 1 to 2 minutes. It seems that only tech-savvy owners (or bots) who know how to interact directly with the blockchain with code can perform these types of transactions in such a short time.

Even if the $40 price is true and APE fell 80% from there to $8, very few were able to sell APE at that price. A more reasonable way to look at the initial price of a newly launched token is to use the volume of the USD traded within the minute divided by the volume of the token. In the case of Binance in the first minute, the total USDT volume is 19.66 million and the total APE volume is 2.15 million, giving an average price of $9.14 in the first minute for APE.

APE/USDT first minute volume. Source: Binance

Using this fairer way of looking at APE’s price right after launch, the token actually fell just 12% since its peak, which isn’t overly dramatic given the current bearish environment. When investors read the headlines, like the next time the token price drops 80% on day one, you should take it with a grain of salt.

With Yuga Lab’s future plans to use APE for all of its products and services and partnering with Animoca Brands to build blockchain NFT games, the future prospects for APE and the Web3 economy built around NFTs could be very interesting. to be.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Coin-Crypto.com. Every investment and trading move involves risks, you should do your own research when making a decision.

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