With the bear market in full swing there has been a big flight to quality. While all projects have taken massive hits, it seems most mid to small cap projects have been totally taken out. On the blue chip side, there has still been big drops: Bored Apes have gone from an all time high floor price of $435k USD down to $75k and CryptoPunks have gone from $440k to $50k, but they are still considered very valuable. Over the past couple of weeks since this hyper bear has begun there has been a major debate over which blue chip to put your money into, the Apes or Punks. If you buy into Apes right now you’re taking on a tremendous amount of risk. I’d argue due to their undeniable historic value, CryptoPunks are the way to go and it isn’t even particularly close.
If you buy Apes right now you are putting yourself at risk. This might sound absolutely insane, but I believe Bored Ape Yacht Club isn’t bullet proof and could still go to 0 for many reasons. Yuga Labs has taken many risks over the past 6 months. By attempting to build an ecosystem in order to boost floor prices, they’ve tied the value of the NFT’s to many unpredictable factors. They’ve released an ERC-20 token, they’ve released a 200k land collection, and they’ve announced a video game. While all provided short term value boosts, in the long term they’ll have to be delicately balanced in order to maintain prices. If any of those factors end up a failure, say the video game becomes a total dud, it can send the entire ecosystem into a death spiral. Or say if the APE coin economy becomes unbalanced and the price tanks to pennies, that also could destroy the BAYC ecosystem. By buying a Bored Ape, you are buying into an entire multi-billion dollar economy that needs to be carefully balanced by a few guys who started their first company a year ago.
CryptoPunks on the other hand, have built absolutely no ecosystem at all. No economy that needs to be delicately balanced. No coin that needs to have deflationary pressures or video game that needs to have mechanics that attract the mainstream. No artifacts or resources that need utility to be traded. CryptoPunks are valuable because they’re the first NFT collection ever created. This will never not be the case. They will always have this importance. This is an intrinsic value that can never be taken away from them. Prices for Punks will go up and down with the market, but as long as NFT’s hold any sort of significance, Punks will hold value. Think of it like a Da Vinci. The value of a Da Vinci only goes up in time because of its history. The Mona Lisa for as long as physical art is relevant will hold value.
I believe CryptoPunks are more comparable to the Mona Lisa while Bored Apes are more comparable to Apple stock. Apple stock is the king of Wall Street. An unbeatable titan that’s been at the top of the business world for a long time. People universally agree Apple is one of the best companies in history. But they are not invincible. One or two bad decisions can set their entire tech ecosystem off balance. Maybe they release an iPhone that has a major security flaw that exposes all user information. Maybe their iPad’s have faulty batteries. Maybe they release a version of OSX that is universally panned. Any kind of major fumble can lead to users switching to Android or Windows. They report one bad earnings and the stock goes south quick. This is the situation Bored Apes is in. They are the undoubted king at the moment. Everything they’ve released has been a hit. But if the video game flops or the tokenomics of APE coin gets imbalanced and the whole sentiment of the Ape ecosystem takes a tumble. CryptoPunks will never have this risk. They are important because they are important. Nobody and nothing other than the elimination of the Ethereum blockchain can change this.
So what does this mean for you the investor? The market is in the crapper right now. Everything is at deep deep discounts. Previously inaccessible blue chips are now accessible to many more investors. You now have options. The two biggest projects in history are for sure CryptoPunks and Bored Apes. I believe one project carries a tremendous amount of risk and will be supremely difficult to hold value. The other will always be valuable because of its importance. Bored Apes needs to be run like a tech company by people who just entered the business world. CryptoPunks never needs to be managed, they are just a historical moment in time. If I wanted to make an investment right now into a bluechip that is sure fire going to hold immense historical value 100 years from now, I’m going with CryptoPunks.