Several NFT-adjacent cryptocurrencies, including ApeCoin and Axie Infinity, posted double-digit losses in the past 24 hours.
ApeCoin (APE), the Ethereum-based token for the growing Bored Ape Yacht Club ecosystem, shed nearly 17% of its value in the past 24 hours and is currently trading at $13.30, according to data from CoinMarketCap.
APE is now the 31st-largest cryptocurrency with a market capitalization of $3.8 billion. Today’s bearish price action now puts the token 66% down from its all-time high of $39.40 recorded in March 2022.
Elsewhere, Axie Infinity (AXS), the token powering the popular play-to-earn crypto game Axie Infinity has dropped nearly 15% over the past 24 hours.
AXS hits an all-time high of $165.37 in November 2021, which is down 82% and currently trading at $28.52, according to data from CoinMarketCap.
The primary driver behind today’s price action is likely recent moves from the Federal Reserve to raise interest rates by half a point on Wednesday.
Though financial markets, including crypto, briefly enjoyed a run-up in prices, yesterday Bitcoin, Ethereum, and major market indices like the Nasdaq and Dow Jones industrial average plummeted. Major stocks like Google’s parent company Alphabet, Microsoft, and Facebook’s Meta all dropped double-digits too.
Meanwhile, Bitcoin is down more than 8% over the past 24 hours and is currently trading at $36,132. Ethereum is also changing hands at $2,710, a 7% drop over the past 24 hours.
Still, a few key narratives may add additional sell pressure on both AXS and APE.
The volatile price action behind APE revolves primarily around the Otherdeeds NFT mint over the weekend.
Users were invited to purchase deeds to plots of land within the yet-to-be-launched Bored Ape metaverse Otherside. Initially announced as a Dutch auction, the Otherside team later said that each deed would be sold at a flat price of 305 APE.
Leading up to the mint on April 30, APE was trading above $26 per token. Post-launch, however, APE lost 50% of its value and currently trades at $13.30. This drop may, in part, be due to holders rotating into other coins now that they’ve scooped up their deed.
The Otherside collection also faced serious backlash for its inefficient code, robbing users of more than $200M in gas fees. This, too, may have turned APE investors bearish.
Nearly $100M has been spent on gas for the BAYC land sale in one hour. This is money that could have gone to Yuga or stayed in user's pockets.
The contract had nearly zero gas optimizations. I'll explain a few gas optimization tricks that could have saved many millions below 👇 pic.twitter.com/CsYvWdEQKc
According to data provided by Nansen, the daily revenues on Axie’s Ronin saw a decline of 99%, from an all-time high of $17.5 million reported in August 2021 to just $6,000 today.
Axie infinity generates revenue through marketplace and breeding fees. A breeding fee of 0.5 AXS is charged whenever a new Axie creature is created, and a marketplace fee of 5.25% is charged whenever Axies are traded.
Though the number of trades in the NFT market has been steadily increasing, specific concerns within these ecosystems appear to be keeping AXS and APE under serious pressure.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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