What Makes Bored Ape NFTs So Desirable?
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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.

By SOPHIE HAIGNEY
Fri, Feb 25, 2022 1:58pmGrey Clock 4 min

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.”



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Cocoa and Coffee Prices Have Surged. Climate Change Will Only Take Them Higher.

Some chocolatiers and coffee makers say they will have to pass on the extra cost to consumers

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Global prices for cocoa and coffee are surging as severe weather events hamper production in key regions, raising questions from farm to table over the long-term damage climate change could have on soft commodities.

Cultivating cocoa and coffee requires very specific temperature, water and soil conditions. Now, more frequent heat waves, heavy rainfalls and droughts are damaging harvests and crippling supplies amid ever growing demand from customers worldwide.

“Adverse weather conditions, mostly in the Southern Hemisphere, have played an important role in sending several food commodities sharply higher,” said Ole Hansen , head of commodity strategy at Saxo Bank.

The spikes in prices are a threat to coffee and chocolate makers across the globe.

Swiss consumer-goods giant Nestlé was able to pass only a fraction of the cocoa price increase to customers last year, and it may need to adjust pricing in the future due to persistently high prices, a spokesperson said.

Italian coffee maker Lavazza reported revenue of more than $3 billion for last year, but said profitability was hit by soaring coffee bean prices, particularly for green and Robusta coffee, and its decision to limit price increases.

Likewise, chocolatier Chocoladefabriken Lindt & Spruengli said in its 2023 results that weather and climate conditions played a major role in the global shortage of cocoa beans that led to historically high prices. The company had to lift the sales prices of its products and said it would need to further raise them this year and next if cocoa prices remain at current levels.

Hershey ’s chief executive, Michele Buck , said in February that historic cocoa prices are expected to limit earnings growth this year, and that the company plans to use “every tool in its toolbox,” including price hikes, to manage the impact on business.

In West Africa, where about 70% of global cocoa is produced, powerhouses Ivory Coast and Ghana are facing catastrophic harvests this season as El Niño—the pattern of above-average sea surface temperatures—led to unseasonal heavy rainfalls followed by strong heat waves.

Extreme heat has weakened cocoa trees already damaged from heavy rainfall at the end of last year, according to Morningstar DBRS’s Aarti Magan and Moritz Steinbauer. The rain also worsened road conditions, disrupting cocoa bean deliveries to export ports.

The International Cocoa Organization—a global body composed of cocoa producing and consuming member countries—said in its latest monthly report that it expects the global supply deficit to widen to 374,000 metric tons in the 2023-24 season, from 74,000 tons last season. Global cocoa supply is anticipated to decline by almost 11% to 4.449 million tons when compared with 2022-23.

“Significant declines in production are expected from the top producing countries as they are envisaged to feel the detrimental effect of unfavorable weather conditions and diseases,” the organization said.

While the effects of climate change are severe, other serious structural issues are also hitting West African cocoa production in the short- to medium-term. Illegal mining poses a significant threat to cocoa farms in Ghana, destroying arable land and poisoning water supplies, and the problem is becoming increasingly relevant in the Ivory Coast, according to BMI.

The issues are being magnified by deforestation carried out to increase cocoa production. Since 1950, Ivory Coast has lost around 90% of its forests, while Ghana has lost around 65% over the same period. This has driven farmers to areas less suited to cocoa cultivation like grasslands, increasing the amount of labor required and bringing further downside risks to the harvest, the research firm said.

The Ivory Coast’s cocoa mid-crop harvest—which officially starts in April and runs until September—is expected to fall to 400,000-500,000 tons from 600,000-620,000 tons last year, with weather expected to play a crucial role in shaping the market balance for the season, ING analysts said, citing estimates from the country’s cocoa regulator. Ghana’s cocoa board also forecasts a slump in the harvest for this season to as low as 422,500 tons, the poorest in more than 20 years, according to BMI.

Neither regulator responded to a request for comment.

Meanwhile, extreme droughts in Southeast Asia—particularly in Vietnam and Indonesia—are resulting in lower coffee bean harvests, hurting producers’ output and global exports. Coffee inventories have recovered somewhat in recent weeks but remain low in recent historical terms. Robusta coffee has seen a severe deterioration in export expectations, while Arabica coffee is expected to return to a relatively narrow surplus this year, said Charles Hart, senior commodities analyst at BMI.

The global coffee benchmark prices, London Robusta futures, are up by 15% on-month to $3,825 a ton. Arabica coffee prices have also surged 17% over the last month to $2.16 a pound in lockstep with Robusta—its highest level since October 2022. Cocoa prices have more than tripled on-year over these supply crunch fears, and risen 49% in the last month alone to $10,050 a ton.

“Cocoa trees are particularly sensitive to weather and require very specific conditions to grow, this means that cocoa prices are especially vulnerable to extreme weather events, such as drought and periods of intense heat, as well as the longer-term impact of climate change,” said Lucrezia Cogliati, associate commodities analyst at BMI.

Cogliati said global cocoa consumption is expected to outpace production for the third consecutive season, with intense seasonal West African winds and plant diseases contributing to significant declines.

Consumers hoping for a return to cheaper prices for life’s little luxuries in the midterm may also be in for a bitter surprise.

“There is no sugarcoating it—consumers will ultimately be faced with higher chocolate prices, products that contain less chocolate, and/or shrinking product sizes,” Morningstar’s Magan and Steinbauer said in a report.

“We anticipate consumers could respond by searching widely for promotional discounts, trading down to value-based chocolate and confectionary products from premium products, switching to private-label from branded products and/or reducing volumes altogether.”

The record-breaking rally for cocoa and coffee is likely more than just a flash in the pan, according to Citi analysts, as adverse weather conditions and strong demand trends are likely to support prices in the months ahead. The U.S. bank estimates Arabica coffee futures in a range of $1.88-$2.15 a pound for the current year, but said projections could be lifted if the outlook for 2024-25 tightens further.

At the heart of it all, climate change is set to play a major role, as the impact of extreme weather events could exacerbate the pressure on cocoa and coffee supplies, according to market watchers.

“I don’t expect prices to remain at these levels, but if we continue to see more unusual weather as a result of global warming then we certainly could see more volatility in terms of cocoa yields going forward, which could impact pricing,” said Paul Joules, commodities analyst at Rabobank.

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