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Stephen Curry Apes In $180,000 Bonanza

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  • Crypto is a community-driven ecosystem.
  • To successfully invest in crypto (and especially NFTs), it’s important to understand the communities that are behind these projects.
  • But it may be difficult for new investors to successfully determine which communities will be able to support a project and bring it to life.

Investment Idea

Crypto today is ostensibly about long-term investing, quick money schemes and stacking sats. But the undercurrent to all this is a social network of thousands of young, mostly male, investors from around the world communicating 24/7 on Telegram and Discord.

Crypto is driven by those communities who have bonded together over an interesting technology. You can’t understand this world without understanding the glue that holds it together. Community explains why some projects die out and others reach billions of TVL within days, and why NFTs have almost become the dominant use of the Ethereum Virtual Machine.

A strong community has driven projects like Synthetix, Solana and Abracadabra to great success, even as their core products may have fundamental defects. And these same communities play an even more important role in the NFT space.

Potential

NBA superstar Stephen Curry recently purchased a “Bored Ape Yacht Club” NFT for $180,000. Why did this blue ape in a tuxedo fetch such a high price? For one, it’s a digital signal of status, it conveys a sense of taste and wealth to others on the internet just like a luxury watch does in real life.

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More importantly, Bored Apes, like many other NFTs, double “up as [a] Yacht Club membership card”. Bored Ape holders get access to a member-only Discord channel where wealthy NFT holders can hang out and interact. Among the list of Bored Ape Holders are the music group Chainsmokers, music executive Jermaine Dupri and NFL superstar Dez Bryant. Deals, partnerships, and mentorship are commonplace behind these closed doors. And a $180,000 Bored Ape is what gets you in. This type of access is legitimately valuable, which is what helps support the NFT price.

Risk

A major risk for NFTs is that they don’t have a universally-accepted pricing model. In the end, what you are buying is a very expensive JPEG, status signaling and access to an exclusive club.

During a recession or global crisis, luxuries like these are often deprioritised, leading to a drop in price and difficulty in selling. Some have argued that it’s unlikely prominent NFTs collections like Bored Ape Yacht Club will crash in price, as their holders are wealthy and will not have to sell to make ends meet. However, luxury purchases significantly decrease during downturns.

NFT project values often live and die by the community. Projects that can attract prominent, active NFT holders will often attract more wealthy purchasers leading to a virtuous cycle. But these communities can die out over time, and the NFTs that purchase access will depreciate along with them.

Conclusion
NFTs are an art piece, signaling tool and a membership to an exclusive club of like-minded individuals. NFT collections with strong communities like the Bored Ape Yacht club will continue to grow in prominence if more and more notable individuals like Stephen Curry join the mix.

Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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