Born out of the infamous Bored Ape Yacht Club (BAYC) non fungible token (NFT) collection, ApeCoin (APE) is a crypto token that powers the APE ecosystem, providing holders with access to exclusive physical and digital events, online games, Web3 services, merch, and more. For investors, ApeCoin provides investment exposure to the Web3 ecosystem built on the Bored Ape brand.
Investing in cryptocurrencies, decentralized finance (DeFi), and other initial coin offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.
What Is ApeCoin?
ApeCoin (APE) is a utility and governance token that was created to empower the community surrounding the APE ecosystem, which was built on the back of the Bored Ape Yacht Club (BAYC).
The Bored Ape Yacht Club (BAYC) is a highly popular NFT collection composed of 10,000 unique images of cartoon apes. During the height of the NFT boom in 2021, Bored Ape emerged as one of the most popular NFTs, with rare Apes selling for hundreds of millions of dollars.
The popularity of BAYC led to athletes, musicians, and actors purchasing Bored Ape NFTs to use as profile pictures on social media, adding to the cult status of Bored Apes as profile picture (PFP) NFTs. However, Bored Ape Yacht Club and the company behind the venture, Yuga Labs, has also faced its fair share of controversies and challenges, ranging from allegations over racist imagery to an investigation by the SEC for potentially breaching securities laws.
Launched on March 17, 2022, by the APE Foundation as an ERC-20 token, ApeCoin enables token holders to participate in the APE ecosystem’s decision-making process through the ApeCoin DAO, gain access to exclusive events, games, services, and merch, and use the token as currency within the ecosystem.
The token also exists to incentivize third-party developers to participate in the APE ecosystem by building applications that incorporate ApeCoin.
Cryptocurrencies, like ApeCoin, are decentralized digital assets that typically act as a proxy for the success of a particular crypto project. Investors purchase them to speculate on a future increase in value. However, cryptocurrencies are a high-risk asset class, so any investment in this market should be preceded with in-depth research into the cryptocurrency you plan to purchase.
How to Buy ApeCoin
Buying ApeCoin works in the same way as buying any other cryptocurrency. The main difference between buying Bitcoin or Ethereum and ApeCoin is that the latter is not supported by all leading cryptocurrency exchanges.
Crypto exchanges are online trading platforms for digital assets that function in a similar way as online stock brokerage platforms, such as Fidelity or Charles Schwab. The only difference is that you use U.S. dollars to buy and sell cryptocurrencies instead of traditional financial investments, such as stocks and bonds.
Step 1: Sign up for a crypto exchange
The first thing you need to do if you are looking to buy ApeCoin is to sign up for an exchange that supports the cryptocurrency. Currently, Binance, Coinbase, and Kraken are among the largest exchanges supporting APE.
Step 2: Complete KYC and deposit funds in your exchange account
Once you have chosen which exchange to trade on, register using your email address and a password, complete the Know Your Customer ( KYC) onboarding process, and deposit U.S. dollars into your account using one of the available payment options. Wire transfers are usually available for U.S. customers.
Step 3: Select ApeCoin among the available assets and buy the token
Once you have funded your account, you click on ApeCoin in the list of tradable assets and place an order to buy the amount of APE you would like to purchase. Verify that all the order details are correct and confirm the transaction. As soon as your order is filled, you will receive the APE tokens on your exchange account.
Step 4: Securely store your ApeCoin in your personal wallet
Finally, make sure to transfer your APE tokens from the exchange to your personal, non-custodial crypto wallet that supports ApeCoin. By securing your tokens in your own wallet as opposed to on an exchange, you can avoid losing your assets in case of an exchange bankruptcy or a hack.
Alternative Ways to Buy ApeCoin
While purchasing ApeCoin on a crypto exchange is arguably the simplest option, you could also purchase APE on a peer-to-peer (P2P) exchange or a decentralized exchange (DEX).
To purchase APE coins on a P2P exchange, you first need to choose a marketplace that supports ApeCoin, sign up for the platform, and complete the verification process. Next, scroll through the available offers to buy ApeCoin for a payment method that works for you. Click on an offer that suits you and complete the purchase. These marketplaces typically use escrow to enhance security, but it’s still advisable to only trade with users with high trust ratings.
Alternatively, you could purchase ApeCoin on a decentralized exchange by swapping another cryptocurrency for it. As APE is an ERC-20 token, you could swap Ethereum-based stablecoins or ETH on a decentralized exchange like Uniswap for ApeCoin, for example. Moreover, numerous crypto wallets also offer in-app token swapping, enabling you to swap other ERC-20 tokens for APE.
Unlike traditional brokerage firms, cryptocurrency exchanges are not members of the Securities Investor Protection Corp. (SIPC). Therefore, unless user terms specify otherwise, investors with cryptocurrency assets commingled on a custodial cryptocurrency exchange could potentially lose their funds as unsecured creditors.
What You Need to Open a Cryptocurrency Exchange Account
Let’s take a look at the requirements to open an account on a crypto exchange.
Digital asset exchanges typically require you to provide the following information:
- Full name
- Home address
- Email address
- Phone number
Moreover, to pass an exchange’s KYC (Know Your Customer) process, you will also need to provide a copy of your government-issued ID and proof of address. You may also be asked questions about your income and your level of expertise as an investor.
Crypto exchanges typically require you to make a minimum deposit, ranging from $10 to $20. However, there are a handful of trading apps that allow you to purchase crypto for as little as $1.
Types of Cryptocurrency Exchanges
Centralized cryptocurrency exchanges are online trading platforms akin to online brokerages like Merrill Edge, Fidelity, or E*TRADE. You can use them to trade a variety of digital currencies and tokens using U.S. dollars in the same way you would buy stocks using your online brokerage account after you have registered for an account and completed the KYC process.
Decentralized exchanges are smart contract-powered online trading platforms that enable users to trade crypto on a peer-to-peer basis without the need for a central authority. Assets are traded from wallet to wallet. No account creation or KYC process is required.
Hybrid exchanges combine a centralized order book for trade-matching with decentralized asset custody to allow digital asset investors to benefit from the best of both centralized and decentralized trading venues.
Best Cryptocurrency Exchanges
|Company||Transaction Fees||Minimum Deposit or Purchase||Trade Limits|
|Coinbase||0.00% to 0.60%||$2||No|
|Kraken||0.00% to 0.26%||$1||No|
|Uphold||0.8% to 1.2%||$10||Yes|
Factors to Consider When Opening a Cryptocurrency Exchange Account
Security: Choose an exchange that provides a high level of security, highlighted by a track record of no exchange hacks.
Fees: Trading fees can eat into your overall investment returns, especially when you trade regularly on a platform that charges high commissions. Therefore, it’s important to choose an exchange with low fees.
Number and quality of supported cryptocurrencies: If you are looking to buy a lesser-known cryptocurrency like ApeCoin, you will need to sign up for an exchange that supports a large number of digital currencies and tokens.
Wallet safety: Pick an exchange that provides a secure wallet infrastructure, ideally with added security features such as wallet address whitelisting. Address whitelisting is a feature by leading crypto exchanges that only allows cryptocurrency withdrawals to specific “whitelisted” external wallet addresses chosen by the customer.
Storage and custody: Choose an exchange that holds most, if not all, customer funds in cold storage to ensure that your assets held on the exchange cannot be stolen by hackers. Moreover, some exchanges also have insured customer funds, adding another security layer to their crypto custody solutions.
Cryptocurrency experts typically advise investors against leaving funds on a centralized exchange because exchange bankruptcies can lead to a complete loss of assets held with the company.
The recent collapse of crypto exchange FTX highlighted this risk when billions of dollars in user funds were lost. Hence, trading on a decentralized exchange (where you control the custody of your assets) is typically considered the safer option. Having said that, DEXs are unregulated, and there is no customer protection if funds are lost due to hacks.
How Does ApeCoin Work?
ApeCoin is an ERC-20 token operating on the Ethereum blockchain that enables holders to gain access to a variety of products and services offered by the APE ecosystem and vote on the future direction of the Web3 project.
How Do I Use ApeCoin?
You can use ApeCoin to gain entrance to physical or digital events held by the APE community, purchase BAYC merchandise, and spend it within the APE ecosystem’s suite of products and services. Moreover, you can use APE to participate in the ApeCoin DAO if you’d like to have a say in the future of the APE ecosystem.
How Can I Earn With ApeCoin?
ApeCoin can be staked to earn additional APE tokens, making ApeCoin a yield-generating crypto asset. You can stake APE tokens via ApeStake.io. All you need to do is connect your crypto wallet and start earning staking rewards.
Alternatively, you could deposit APE tokens on Binance to make use of Binance Earn accounts that enable you to earn yield on your ApeCoin holdings for a set period of time. While the yields offered are high, they come with the risk of leaving your funds on a centralized exchange, thus giving up control over your crypto.