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.”
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
As geopolitical tensions rise, Taiwan is shifting its economy to rely more on the U.S. and other countries but at a cost
TAIPEI—For years, Beijing hoped to win control of Taiwan by convincing its people their economic futures were inextricably tied to China.
Instead, more Taiwanese businesses are pivoting to the U.S. and other markets, reducing the island democracy’s dependence on China and angering Beijing as it sees its economic leverage over Taiwan ebb.
In one sign of the shift, the U.S. replaced mainland China as the top buyer of Taiwanese agricultural products for the first time last year.
Electronics firms such as chip maker Taiwan Semiconductor Manufacturing Co. are also selling more goods to American and other non-Chinese buyers, thanks in part to Washington’s chip restrictions and Apple’s bets on Taiwanese chips.
Overall, Taiwanese exports to the U.S. in the first 10 months of 2023 were more than 80% higher than in the same period of 2018, Taiwanese government data shows. Taiwanese exports to the mainland were 1% lower—a major change from a decade or so ago when China’s and Taiwan’s economies were rapidly integrating.
Taiwan’s outbound investment has also shifted. After flowing mostly to mainland China in the early 2000s, it has now moved decisively toward other destinations, including Southeast Asia, India and the U.S.
Taiwanese electronics giant Foxconn, which assembles iPhones in mainland China, is expanding in India and Vietnam after Apple began pushing its suppliers to diversify.
Chinese state media recently reported that China had opened tax and land-use probes into Foxconn. Though Taiwanese officials and analysts interpreted the probes as a sign that China wants Foxconn founder Terry Gou to drop plans to run in Taiwan’s presidential election in January, some have said Beijing may also be trying to pressure Foxconn into resisting decoupling with China.
“Any attempt to ‘talk down’ the mainland’s economy or to seek ‘decoupling’ is driven by ulterior motives and will be futile,” said a spokeswoman for Beijing’s Taiwan Affairs Office in September. “The mainland is always the best choice for Taiwanese compatriots and businesses.”
Fully decoupling from mainland China’s economy likely isn’t possible, and would be disastrous for Taiwan, not to mention China, even if it were.
Foxconn and other major Taiwanese companies depend heavily on China for parts, testing and buyers. Some 25% of Taiwan’s electronic-parts imports still come from the mainland.
If China’s weakened economy returns to strong growth, it could shift the calculus back in favor of the mainland, where the Communist Party claims Taiwan despite never having ruled it. About 21% of Taiwan’s total goods trade this year has been with mainland China, versus 14% for the U.S., though the U.S. share has risen from 11% in 2018.
“My hunch is that the large manufacturing sectors will try to stay in the Chinese market, even with harsh conditions,” said Alexander Huang, director of the international affairs department of the opposition Kuomintang Party, whose supporters include business people with mainland ties. “If you talk to those business owners, they say, ‘Nah, no way will I give it to my competitors.’”
Even so, many forces are pushing Taiwan to rewire its economic relationship with China.
Trump-era tariffs and Biden administration export controls have raised the cost of sourcing from China, and in some cases prohibited it. U.S. firms are pushing their Taiwanese suppliers to diversify sourcing, and rising wages in China have made it less attractive than before.
Long-running shifts in Taiwanese sentiment toward China—and China’s own efforts to punish the island using its economic leverage—are also factors. China has banned Taiwanese agricultural products such as pineapple and, in 2022, grouper fish, and restricted outbound tourism to Taiwan.
Those restrictions to some degree have backfired, pushing Taiwanese businesses to look elsewhere.
Chang Chia-sheng, who runs a fish farming operation in Taiwan, said his main export target a decade ago was mainland China. But as geopolitical tensions climbed, he looked elsewhere. Sales to Americans have jumped fivefold since 2018, he said. “In the U.S., things just seem to work out more easily,” Chang said.
The U.S. and Taiwan reached an agreement in May on a number of trade and investment measures to deepen ties, though the deal stopped short of reducing tariffs.
In the June quarter of 2023, 63% of revenue at TSMC, which makes most of the world’s most cutting-edge logic chips, came from the U.S., up from 54% in the same period in 2018, according to S&P Global data. Just 12% of TSMC’s revenue now comes from Chinese buyers, down from 22% in the second quarter of 2018.
Taiwan’s government is also encouraging closer economic links with Southeast Asia, South Asia, Australia and New Zealand. Its “New Southbound Policy,” rolled out in 2016, has been the subject of fierce debate in Taiwan, with the Kuomintang Party saying steps to boost relations—like handing out scholarships—aren’t worth the cost.
Exports to “New Southbound” partners have risen, however, to $66 billion in the first nine months of 2023, about 50% higher than the same period in 2016.
“Frankly speaking, we’re responding reactively” to the need for more diverse trading partners, Taiwan’s Economic Minister Wang Mei-hua said. “Taiwan needs to manage the risks on its own, but we also need our allies to join us more in mitigating these risks.”
Together, the U.S. and the six largest Southeast Asian economies accounted for 36% of Taiwanese exports in the third quarter of 2023, according to data from CEIC, surpassing the percentage sent to mainland China and Hong Kong on a quarterly basis for the first time since 2002.
In September, Taiwan sent less than 21% of its exports to the mainland, the lowest percentage since the global financial crisis.
Taiwanese foreign investment into mainland China, steady at around $10 billion a year for most of the early 2010s, plummeted in late 2018 and has since been running at about half that level, according to Taiwanese government data. In 2023 so far, just 13% of Taiwan’s investment went to mainland China; 25% went to other Asian locations, and nearly half went to the U.S.
A survey of Taiwanese businesses conducted last year on behalf of the Center for Strategic and International Studies, a Washington think tank, found that nearly 60% had moved or were considering moving some production or sourcing out of China—a significantly higher rate than European or American firms.
Jay Yen, chief executive of Yen and Brothers, a Taiwanese frozen-food processing company, said his firm received a government subsidy of around $75,000 to market his products to American consumers. China now only accounts for about 3% of its revenue, he said.
That said, “if you really have to consider the risks of a war between the U.S. and China and its potential impact on Taiwan, you might want to place your bets on a third country—neither China nor the U.S.,” Yen added.
After China began to open up its economy in the late 1970s, Taiwanese businesses were among the first investors.
By the 2000s, China seemed to be succeeding in its strategy of integrating the two economies, with more than 28% of Taiwan’s exports going to the mainland in 2010, from less than 4% a decade earlier.
Direct flights between the two sides were normalised for the first time in decades. Mainland tourists were allowed to visit Taiwan on their own.
By 2014, the tide was turning as more Taiwanese grew worried about over dependence on China. Student demonstrators protested against a trade pact, later abandoned, that would have deepened ties with China. President Tsai Ing-wen, who took office in 2016, has pushed to diversify Taiwan’s economy.
China has responded by moving trade issues more into the spotlight.
In April, it opened an investigation into Taiwanese trade restrictions that it says limit exports of more than 2,400 items from the mainland to the island in violation of World Trade Organization rules. In October, China’s Ministry of Commerce announced the probe would be extended until Jan. 12—the day before Taiwan’s coming election.
Taiwan’s government has called the probe politically motivated.
Chinese officials have implied that Beijing could suspend preferential tariff rates for some Taiwanese goods in China under a 2010 deal signed when Kuomintang’s Ma Ying-jeou was president. Beijing has also reacted angrily to Taiwan’s recent trade agreement with the U.S.
For Taiwanese companies, building and operating new factories in places other than China isn’t cheap or easy. Protests have at times disrupted operations at Indian plants operated by Foxconn and Wistron, another Apple supplier. In September, a fire halted production at a Taiwanese facility in Tamil Nadu.
Still, some Taiwanese businesspeople have clearly soured on China.
“The electronics industry has already become a Chinese empire, not a Taiwanese one,” says Leo Chiu, who worked in mainland China in quality control for an electronics manufacturer for 14 years before concluding he couldn’t move up further there and returning to Taiwan in 2019. Many of his old colleagues have left, he said.
“If Xi Jinping steps down, there’s still a chance it could change,” says Chiu. “But I think it’s very hard.”
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’