Good day everybody,
Welcome to CryptoGod-1's blog on all things crypto. There was a somewhat shock to many in the Bored Ape Yacht Club community in the recent hours as they realised two whales within their community had sold a total of 72 BAYC NFTs. In doing so, the sales pocketed a handsome amount of ETH but also caused a major crash in the BAYC price due to some interesting developments and further sales.
72 Apes Sold
It was announced by @rektmando in a tweet on the 22nd of February that he, and his organisation, would be selling their collection of Apes and Mutants. It was decided after some consideration and to make the most of the current liquidity in the market to let the 72 Apes go. Very acceptable in most peoples books, they invested in their asset and decided it was the right time to sell, likely for a nice mark up from the original price the NFTs were purchased for.
Impact on Price
The average trading price over the previous week had been in and around 76 - 79 ETH. Not bad considering the price of ETH is sitting at about $1,600, meaning selling a single BAYC NFT at that price would have brought in around $121 - 126 thousand per Ape. Now imagine having 72 of them to sell!
Apparently they got an average price of 78 ETH on their sales, meaning the entire combined amount they received was a whopping $9 million give or take. Of course there would have royalties to pay on top of that, but they picked an excellent time to sell considering OpenSea is currently charging 0% on fees. They managed to save a tidy $225,000 by not having to pay the standard 2.5% secondary sales fee.
As for the impact on the overall price, as shown in the analytics data from OpenSea, the collection saw its price crash by a massive 23% from its 76 - 79 ETH all the way down to 56 ETH. It has since recovered to a Floor Price of 68 ETH, but it has still been a massive blow for the collection.
As you can see below in the detailed 'last 24 hours' part of the analysis, the Floor Price has settled at a drop of 9%. Not as bad as the initial time of sales, but that is a staggering amount in anybody's books, and shows the impact that having so many Apes go on sale in such a short space of time can do to the market. Assuming the new Floor Price of around 68 ETH steadies out over the coming days and remains level, then the actions of these sale will have cost every other BAYC holder about 10 ETH, or $16,000.
Now you might be wondering why did it have such an impact on price, and of course, who is the second person selling? Well, as shown in the below tweet, after @rektmando sold his in the 77-79 ETH bracket, another use named @machibigbrother jumped in and began selling Apes. In fact, he was selling the same Apes that he bought off @rektmando previously, and still owns a healthy supply of over 100 Apes.
So why would someone buy the Apes at a high price and then flood the market with them once again at a lower price? Simple. Taxes, and more importantly, realised loses. At least that would be the most realistic and sensible option. If so, then clearly @machibigbrother decided it was in his best interest to purchase these Apes and sell them again at a loss in order to write it off against whatever taxes he must owe. A common ploy in the crypto space, but certainly one which was unappreciated by the BAYC community.
Not everyone was fully aware however, and some in the community assumed he was just selling for whatever price he felt like. They most likely assumed @machibigbrother had bought them early and was selling them still at profit, but it was quite quickly clarified that this was not the case.
To put it into perspective just how many BAYC NFTs @machibigbrother held after he had purchased those from @rektmando, as pointed out by @Binaso8, he was the owner of nearly 2% of the entire collection at one point. Imagine that, 2% of an entire collection, an entire asset. Compare that to owning 2% of Bitcoin, you would be holding 420,000 Bitcoin! Staggering.
Tough times for those in the BAYC community, having seen the value of their NFT drop over the past few days. It is always the risk one takes when being a member of such a community, and while many of the holders are understanding of the need to maintain the Apes value, others are happy to manipulate it for their own benefit. All in all if the Apes are being sold at a loss for Tax reasons, then so be it. While people might complain they are losing value in their NFTs due to this, others will point to the fact people just managed to purchase a bunch of Apes at below market value. Its all in the name of the game.
Have a great day.
Peace. CryptoGod-1.
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