ETF NEWS - ULTUMUS

Bored Ape ETF

Written by Bernie Thurston | 20 June 2022

Iconic Funds launches ApeCoin ETP 

German crypto ETP specialist Iconic Funds has launched the world’s first APE ETP which invests in the native coin of the ApeCoin network. 

 

The Iconic Physical ApeCoin ETP (IAPE) has been listed in Stuttgart, and trades in USD. 

ApeCoin is most famous for its Bored Ape Yacht Club NFTs, which play a pivotal role in promoting its blockchain. These NFTs are just head and shoulders drawings of a cartoon monkey. The monkey wears different clothing in each drawing or has different facial expressions. Most Bored Apes sell for over $100K. 

 

Supporting Bored Apes is a company called Yuga Labs, which created the Bored Apes and hopes to build ApeCoin into a fully-fledged “ecosystem” or “metaverse” one day. Yuga and its VC backers own a very large chunk ApeCoins.  

 

Promoting Bored Apes are a bevy of celebrities, who were given or bought the Bored Apes. Serena Williams, Stephen Currey, Snoop Dogg, Justin Bieber are among the celebrities. The celebrity ownership and promotion has helped drive the price of these NFTs up.  

 

The fund charges 1.49%. 


 

Bernie’s commentary – Absurd scheme 

Here comes a screed. 

 

Bored Apes are seemingly just a scam: a potential ponzi scheme. Poorly drawn monkey faces by a mediocre artist selling for the price of a house deposit. Who needs tulips or subprime CDOs when you have this? 

 

Driving this pump and dump is the litany of B-list celebrities, who boost this on social media. As a general law of nature: the more celebrities selling a product, the more worthless that product is likely to be. Microsoft Office, Vanguard’s index funds, McDonald’s breakfast, Ultumus Global Index Aggregation – great products do not need celebrity promoters. Great product sells themselves.  

 

But really gets my goat is: what exactly is Yuga Labs, the company behind Bored Apes which has received backing from Andreessen Horowitz, role in bringing on these celebrities and creating the coin? Is this definitely not a rug pull? And is what they’re doing definitely legal?  

 

CoinDesk has an interesting essay on this which asks exactly this question: is ApeCoin even legal? (Essay here). Here’s what they reported: 

 

According to Rohan Grey, a law professor at Willamette University and crypto regulation observer, the distinction between ApeCoin DAO and Yuga Labs probably also has to do with something called the Hinman Test. It’s named for former SEC official William Hinman, who now works at Andreessen Horowitz; Hinman’s idea was that if a governing body is "sufficiently decentralized," it’s free to issue a token without having to register it as a security. ApeCoin DAO is (at least nominally) decentralized; Yuga Labs is not. 

“It's the next iteration of the crypto world’s attempts to get around securities regulation,” [Prof Grey] said. “First of all it was coins, and then in 2017 with the [SEC’s] ICO report they couldn't do that, so they switched to stablecoins, and then there was a clamp-down on that, so they switched to NFTs.” 

In Grey’s opinion, ApeCoin amounts to an attempt by the crypto industry “to almost relitigate 2017 – they were kicked out of the bar wearing a fake mustache, now they've come back with a fake nose in a week.”

The timing of this is probably the last thing a battered industry needs right now.