Fact or fiction? Did ApeCoin (APE) really drop by 80% since launch?

ApeCoin (APE), the governance token of the well-known Bored Ape Yacht Membership (BAYC) NFT venture was airdropped to BAYC and Mutant Ape Yacht Membership (MAYC) homeowners at 8.30 am EST on March 17 and solely eight hours after APE turned tradable within the open market, it has already jumped to the a hundred and tenth most traded token ranked by CoinGecko, totaling $900 million in buying and selling quantity throughout all tracked platforms.

As one would anticipate, there have been some risky worth actions minutes after the airdrop and headlines present the value of APE dropping 80% since its launch. This raises the query of whether or not the strange BAYC and MAYC proprietor might have bought APE at $40 as a substitute of $14, which it’s buying and selling for on the time of publishing.

Let’s check out APE’s worth minutes after the airdrop was claimed and the token listed on Binance, FTX, Gate and SushiSwap to evaluate the dimensions of the value discrepancies throughout the preliminary worth discovery intervals.

ApeCoin spot 1-minute chart. Supply: FTX

The spot worth chart above exhibits that on the FTX one-minute chart, APE was buying and selling as excessive as $40 within the second minute however the perpetual worth chart beneath exhibits that within the first minute, it solely went as much as as excessive as $15 on the highest level.

ApeCoin perpetual 1-minute chart. Supply: FTX

Binance exhibits a excessive of $28 on the minute of the airdrop from the one-minute chart whereas Gate exhibits an unbelievably excessive $214 on the identical minute.

APE/USDT 1-minute chart. Supply: Binance
APE/USDT 1-minute chart. Supply: Gate

Whereas the value of newly listed tokens are sometimes risky throughout the preliminary worth discovery intervals and it’s tough to know if transactions really occurred at these ranges, the volumes on these minute candles can provide a great indication of what the precise worth of APE was proper after the airdrop.

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The buying and selling quantity of Binance is the best among the many three platforms used on this article and the reader ought to know that APE can be traded on different platforms. Within the first 5 minutes, Binance’s whole buying and selling quantity was $42 million, whereas FTX perpetual’s buying and selling quantity is in whole $18 million and the spot quantity is $6 million. Gate solely has $1,665 buying and selling quantity on the candle, which exhibits the best worth of $214 and solely $43,000 whole quantity within the first 5 minutes.

So it’s clear to see that the extra dependable worth of APE minutes after the airdrop is from Binance, which is round $28 and occurred on the minute of the airdrop. It isn’t unusual to see a big drop in worth within the newly launched tokens within the early buying and selling hours, because it occurred to many comparable tokens. The query is whether or not an strange non-tech savvy proprietor might have bought the token within the first 5 minutes to keep away from such a drop. The reply is sort of actually no.

First, the fuel worth for minting APE skyrocketed to 10 instances (or much more) than the conventional worth proper after the airdrop. Until one is prepared to take nice dangers bidding up the fuel worth to get the APE forward of everybody else (and bear in mind, at this level, the APE worth might be not discoverable wherever), it is vitally tough to even declare APE inside one minute.

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Second, as soon as APE is within the recipient’s Ethereum pockets, it needs to be transferred to centralized exchanges (CEXs) corresponding to Binance and FTX to be bought. This additionally takes a while, relying on the visitors on the chain on the time. The quickest manner can be to make use of a decentralized alternate (DEX) by merely connecting the Ethereum pockets and swapping APE for one more token.

Nonetheless, one attention-grabbing remark is that APE’s liquidity within the DEX shouldn’t be as a lot as within the CEX. The TVL on the time of writing on Uniswap is comparatively small for APE/USDC and APE/DAI swimming pools, and the liquidity on SushiSwap could be very low — the entire worth locked (TVL) within the APE/USDT pool is barely $67,000.

APE liquidity pool as of March 17. Supply: Uniswap
APE/USDT liquidity pool as of March 17. Supply: SushiSwap

BAYC homeowners can declare about 10,000 APE per NFT and MAYC homeowners can declare about 2,000 APE per NFT. This implies solely 80 BAYC homeowners will be capable of swap your entire airdrop on the worth of $28, given the $45 million TVL of APE/USDC on Uniswap.

No BAYC homeowners can swap the whole lot of the airdrop on SushiSwap for USDT because the TVL of $67,000 can’t cowl 10,000 APE swaps per BAYC or the two,000 APE per MAYC on the worth of $28.

Given the shortage of liquidity within the DEX and the time it takes to switch APE to a CEX corresponding to Binance, it’s virtually unimaginable for an strange proprietor to money out within the first one to 2 minutes on the prime. It appears solely tech-savvy homeowners (or bots) who know easy methods to work together with the blockchain with code immediately can execute some of these transactions in such a brief time frame.

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Even when the value of $40 is true and APE did drop 80% from there to $8, solely only a few have been in a position to promote APE at that worth. A extra affordable manner to take a look at the preliminary worth of a newly launched token is to make use of the amount of USD traded throughout the minute divided by the amount of the token. Within the case of Binance within the first minute, the entire USDT quantity is nineteen.66 million and the entire APE quantity is 2.15 million, which provides a median worth of $9.14 within the first minute for APE.

APE/USDT first minute quantity. Supply: Binance

Utilizing this fairer manner to take a look at APE’s worth instantly after the launch, the token really solely dropped 12% since its peak, which isn’t overly dramatic, given the present bearish surroundings. When buyers learn headlines such because the token worth falls 80% on its first day subsequent time, ensure that to take it with a grain of salt.

With Yuga Lab’s future plans to make use of APE for all its services and products, and the collaboration with Animoca Manufacturers to construct blockchain NFT video games, the longer term outlook for APE and the Web3 economic system constructed round NFTs might be very attention-grabbing.

The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Each funding and buying and selling transfer includes danger, it’s best to conduct your personal analysis when making a call.

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