The new ApeCoin (APE-USD) crypto has plunged as much as 80% after a blockbuster market debut.
ApeCoin is trading in a volatile pattern, falling from a peak of $39.40 to a low of $6.48 before stabilizing. Right now, CoinMarketCap shows APE-USD trading at $14.98.
Why does this matter? ApeCoin is a token linked to the popular Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection.
What Happened With APE Crypto Prices
It appears there are a few reasons for the volatility. After a high-profile ApeCoin debut yesterday, the APE crypto price quickly fell within the first hours of trading. Holders of certain Bored Ape NFTs received the tokens as part of an airdrop. Other investors have the option to purchase APE-USD through a variety of major exchanges.
It seems that some early investors were quick to sell off their tokens, contributing to volatility.
The volatility also appears to be the result of a hacker exploiting the ApeCoin airdrop and selling off more than $800,000 worth of the digital token. The hacker apparently used a process known as a “flash loan” to acquire 60,000 ApeCoin tokens, which were quickly sold for a profit of about $820,000. This process upended the market debut.
Why It Matters
The debut of ApeCoin is a test of sorts for the cryptocurrency market overall. Analysts and investors are watching to gauge demand for new crypto offerings and to see if the market can support a growing number of new entrants. The total market capitalization of the ApeCoin token sits at about $4.1 billion following its debut, making it the 33rd-largest cryptocurrency.
What comes next? After listing the token on major exchanges and conducting an airdrop, the rest of the supply will be split up. The team says 47% will go to the Ape DAO treasury, 16% to Yuga Labs, 8% to the BAYC founders and 14% will go to other launch contributors.
What’s Next for ApeCoin
All eyes remain on ApeCoin to see if the digital token’s price can stabilize and rise higher. The volatility that has occurred following its debut has taken some observers by surprise.
More long term, ApeCoin will need to find a dedicated and committed investor base to support its price. For the time being, investors should keep an eye on ApeCoin from the sidelines.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.