What Makes Bored Ape NFTs So Desirable?
Purchased by celebrities from Justin Bieber to Gwyneth Paltrow these digital avatars promise a vaunted place in the metaverse.
Purchased by celebrities from Justin Bieber to Gwyneth Paltrow these digital avatars promise a vaunted place in the metaverse.
On The Tonight Show in late January, Jimmy Fallon held up a portrait of a cartoon ape wearing a sailor’s hat, a striped shirt and heart-shaped sunglasses. “This is my ape,” he said, as his guest, Paris Hilton, gave it her approval. She also had an ape, which Fallon had earlier shown the audience, a red-furred version wearing sunglasses and an S&M cap. “We’re part of the same community,” Fallon said. “We’re both apes.”
This odd moment between Hilton and Fallon hurtled Bored Ape Yacht Club, a collection of NFTs depicting apes, into the spotlight. Other celebrities were showing off theirs too: In January, Justin Bieber posted a photo on Instagram of his Bored Ape #3001, sometimes called Lonely Bored Ape, which relates to his song “Lonely.” (This ape’s eyes are filled with tears.) Bieber paid $1.29 million for it, according to Etherscan, which tracks blockchain transactions, then went on to purchase a second for $470,000. For many observers, these were record-scratch moments in the middle of a long-running party, the kind of thing that made one wonder: What is going on?
Bored Ape Yacht Club was born in the heady days of April 2021, when the value of cryptocurrency skyrocketed and the market for NFTs exploded. NFT (short for nonfungible token) is a unit of data stored on a blockchain, allowing for a record of who owns what to exist on a decentralized public ledger. Its four founders were pseudonymous, though BuzzFeed News recently identified two of them to be Greg Solano, 32, a writer and editor, and Wylie Aronow, 35. The concept was simple: 10,000 apes, each with a distinct face and outfit, each able to be individually owned.
“The term ape is used affectionately in the crypto community to mean early adopters,” says Nicole Muniz, CEO of Yuga Labs, which was part of the team that created the original ape NFTs, in an email. “We liked the idea of creating a whole collection around apes who became so wealthy because of crypto’s rise, that they became extremely…bored.” Buying an ape also gives one membership to an elite digital club—owners can hang out in Discord servers with like-minded Bored Ape enthusiasts.
A major appeal of Bored Apes is their use as avatars—many owners change their Twitter and WhatsApp and even LinkedIn display pictures to their apes. They draw less from the lo-fi early internet aesthetics of other NFT projects like CryptoPunks and more from comic books and Pokémon cards. The animated apes are frequently absurd; their fur might be cheetah print and their teeth rainbow. They stick out their tongues and smoke cigars and wear cowboy hats or fezzes or large sunglasses. Their use as avatars means the apes come to represent you, or something about you, in a specific digital realm. Last month, Gwyneth Paltrow bought one that, when animated, shows an ape with long blond hair that looks tacked on around its large ears, and big blue eyes—her own features transmuted onto a digital ape.
One reason some are willing to spend big on these apes is that they’re part of one’s outward representation in the burgeoning metaverse, as one might invest in an eye-catching coat or handbag in the physical world. “I’m sort of trying to commit to this being my identity for a while,” says Adam Draper, managing director of Boost VC, a fund that was an early investor in cryptocurrencies, who bought his ape about five months ago for an undisclosed sum that he characterized as “expensive.”
Buying a Bored Ape also means buying the underlying intellectual property to your specific ape’s image—which more and more people are capitalizing by licensing for comic books, film and TV, even licensing images to cannabis companies. Draper says Bored Ape Yacht Club will be “the next Disney.”
“It’s the Disney built by creators,” Draper says. “I believe it’s the fastest bootstrapped way to build IP.
“We are all a part of this community, this club, and we’re all trying to make our own apes more valuable, but by building a comic book series or making a movie or a sculpture, suddenly you’ve created value for the whole network.”
This network effect is what separates Bored Ape Yacht Club from other NFT projects. Athletes like Stephen Curry and Serena Williams, musicians like Eminem, Diplo and Future, and actors like Kevin Hart all own apes. (Many of the high-profile ape owners declined to comment for this article through their representatives.)
“Steph Curry was pretty early to Bored Apes, which makes sense because the NBA has already done partnerships like NBA Top Shot NFTs,” says Mason Nystrom, a senior research analyst at Messari, a crypto-market intelligence platform. “Once you get one celebrity or two, then you get 10, and there’s that flywheel effect.”
The rich and famous flocking to Bored Ape Yacht Club has prompted speculation that some are being given Bored Apes or are paid in exchange for promoting them. Many buy them through MoonPay, a fintech company that builds payment infrastructure for crypto and offers a “concierge service,” which handles the sometimes clunky process of buying NFTs for high-net-worth individuals (celebrities including Post Malone and Fallon have used it to get their Bored Apes). Justin Hamilton, a MoonPay spokesperson, says the service never involves giving Bored Apes to celebrities or paying them, and that it’s a fee-for-service business. Perhaps celebrities simply want them because other celebrities have them, he says.
“It has a lot of similar attributes of other scarce assets, so it’s developed a momentum of its own,” says Hamilton. “It’s sort of like asking, why did the latest Jordan drop become popular, or what’s the magic behind Supreme?”
A Bored Ape is, perhaps above all else, a strange status symbol for a highly particular subset of people.
“This is the Lamborghini of the digital world,” Draper says. “But it’s more effective, because you’re persistently online with it forever, but with a Lamborghini you’re not driving it forever.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Food prices continue to rise at a rapid pace, surprising central banks and pressuring debt-laden governments
LONDON—Fresh out of an energy crisis, Europeans are facing a food-price explosion that is changing diets and forcing consumers across the region to tighten their belts—literally.
This is happening even though inflation as a whole is falling thanks to lower energy prices, presenting a new policy challenge for governments that deployed billions in aid last year to keep businesses and households afloat through the worst energy crisis in decades.
New data on Wednesday showed inflation in the U.K. fell sharply in April as energy prices cooled, following a similar pattern around Europe and in the U.S. But food prices were 19.3% higher than a year earlier.
The continued surge in food prices has caught central bankers off guard and pressured governments that are still reeling from the cost of last year’s emergency support to come to the rescue. And it is pressuring household budgets that are also under strain from rising borrowing costs.
In France, households have cut their food purchases by more than 10% since the invasion of Ukraine, while their purchases of energy have fallen by 4.8%.
In Germany, sales of food fell 1.1% in March from the previous month, and were down 10.3% from a year earlier, the largest drop since records began in 1994. According to the Federal Information Centre for Agriculture, meat consumption was lower in 2022 than at any time since records began in 1989, although it said that might partly reflect a continuing shift toward more plant-based diets.
Food retailers’ profit margins have contracted because they can’t pass on the entire price increases from their suppliers to their customers. Markus Mosa, chief executive of the Edeka supermarket chain, told German media that the company had stopped ordering products from several large suppliers because of rocketing prices.
A survey by the U.K.’s statistics agency earlier this month found that almost three-fifths of the poorest 20% of households were cutting back on food purchases.
“This is an access problem,” said Ludovic Subran, chief economist at insurer Allianz, who previously worked at the United Nations World Food Program. “Total food production has not plummeted. This is an entitlement crisis.”
Food accounts for a much larger share of consumer spending than energy, so a smaller rise in prices has a greater impact on budgets. The U.K.’s Resolution Foundation estimates that by the summer, the cumulative rise in food bills since 2020 will have amounted to 28 billion pounds, equivalent to $34.76 billion, outstripping the rise in energy bills, estimated at £25 billion.
“The cost of living crisis isn’t ending, it is just entering a new phase,” Torsten Bell, the research group’s chief executive, wrote in a recent report.
Food isn’t the only driver of inflation. In the U.K., the core rate of inflation—which excludes food and energy—rose to 6.8% in April from 6.2% in March, its highest level since 1992. Core inflation was close to its record high in the eurozone during the same month.
Still, Bank of England Gov. Andrew Bailey told lawmakers Tuesday that food prices now constitute a “fourth shock” to inflation after the bottlenecks that jammed supply chains during the Covid-19 pandemic, the rise in energy prices that accompanied Russia’s invasion of Ukraine, and surprisingly tight labor markets.
Europe’s governments spent heavily on supporting households as energy prices soared. Now they have less room to borrow given the surge in debt since the pandemic struck in 2020.
Some governments—including those of Italy, Spain and Portugal—have cut sales taxes on food products to ease the burden on consumers. Others are leaning on food retailers to keep their prices in check. In March, the French government negotiated an agreement with leading retailers to refrain from price rises if it is possible to do so.
Retailers have also come under scrutiny in Ireland and a number of other European countries. In the U.K., lawmakers have launched an investigation into the entire food supply chain “from farm to fork.”
“Yesterday I had the food producers into Downing Street, and we’ve also been talking to the supermarkets, to the farmers, looking at every element of the supply chain and what we can do to pass on some of the reduction in costs that are coming through to consumers as fast as possible,” U.K. Treasury Chief Jeremy Hunt said during The Wall Street Journal’s CEO Council Summit in London.
The government’s Competition and Markets Authority last week said it would take a closer look at retailers.
“Given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well,” said Sarah Cardell, who heads the CMA.
Some economists expect that added scrutiny to yield concrete results, assuming retailers won’t want to tarnish their image and will lean on their suppliers to keep prices down.
“With supermarkets now more heavily under the political spotlight, we think it more likely that price momentum in the food basket slows,” said Sanjay Raja, an economist at Deutsche Bank.
It isn’t entirely clear why food prices have risen so fast for so long. In world commodity markets, which set the prices received by farmers, food prices have been falling since April 2022. But raw commodity costs are just one part of the final price. Consumers are also paying for processing, packaging, transport and distribution, and the size of the gap between the farm and the dining table is unusually wide.
The BOE’s Bailey thinks one reason for the bank having misjudged food prices is that food producers entered into longer-term but relatively expensive contracts with fertilizer, energy and other suppliers around the time of Russia’s invasion of Ukraine in their eagerness to guarantee availability at a time of uncertainty.
But as the pressures being placed on retailers suggest, some policy makers suspect that an increase in profit margins may also have played a role. Speaking to lawmakers, Bailey was wary of placing any blame on food suppliers.
“It’s a story about rebuilding margins that were squeezed in the early part of last year,” he said.
The largest single-dwelling sales of the calendar year.
Commercial property sentiment has improved for a consecutive quarter.