ApeCoin’s Performance Compared to Its Rivals
In January, ApeCoin (APE) found itself lagging behind in the metaverse token race. While APE managed to scrape together a 61% gain, rival tokens Decentraland (MANA) and The Sandbox (SAND) raced ahead with impressive gains of 90% and 150%, respectively. It’s like showing up to a party with a lukewarm casserole while everyone else is serving gourmet appetizers.
The Weight of Staking Rewards
One of the main Guilty parties for APE’s performance is its staking reward scheme launched by ApeCoin DAO in December. Initially, it boasted a whopping 90% annual return, but this lucrative incentive has become a double-edged sword. Traders eager to cash in are applying further selling pressure on the token. In fact, Bored Ape Yacht Club (BAYC) NFT holders can double their stake rewards to about 171%—talk about a tempting offer! However, these same traders may just end up selling APE instead of holding it, creating a vicious cycle of decline.
Headwinds on the Horizon: Unlocks and Fundamentals
Holding APE also comes with future risks. An upcoming unlock of around 9% of APE’s circulating supply in March coupled with unimpressive fundamentals may pile additional pressure on the token. It’s like trying to win a marathon with one shoe: the odds aren’t looking good. The potential for dilution is real with various unlock schedules that could cool off any hopes for major appreciation.
The Power of Otherside Metaverse and Yuga Labs
Despite the challenges, there’s a silver lining. The ApeCoin ecosystem remains a top contender in the metaverse space. APE is set to be the primary currency within the Otherside metaverse, a highly anticipated project with 100,000 virtual land plots already valued at 1.6 ETH each. Its competitors are left eating dust with lower-quality offerings. But let’s not pop the champagne just yet—significant structural demand is still a pipedream according to the gurus at crypto analytics firm Messari.
The Future: Is APE Set to Dilute?
As we forge ahead into 2023, ApeCoin is bound for a notable increase in circulating supply — possibly doubling by year’s end. Not only does this signal potential volatility for APE’s price, but it could also lead to the dreaded supply dilution. It’s much like starting a diet: first, you shed the pounds but then holiday gatherings lead to unintended consequences with your waistline. The support and resistance levels for the APE/USD pair hover around $3.29 and $7.69, respectively. Should either buyers or sellers break through these thresholds, we could see some drama unfold.
When the dust settles, APE’s future trajectory depends on a myriad of factors: successful outcomes from partnerships, the vibrance of its gaming projects, and user engagement in the Otherside metaverse. Buckle up, folks. It’s going to be a bumpy ride!
