This is not breaking news to anyone but Bored Ape Yacht Club is by far the biggest brand in the NFT space. They are not just an NFT juggernaut, they are now becoming a mainstream brand. With Stephen Curry, Post Malone, and Jimmy Fallon all rocking Bored Apes as PFP’s it is impossible to deny the fact that BAYC is bigger than just NFT’s. For those less in the know, there are three collections in the Bored Ape universe (outside of the chemistry club)- Bored Apes, Mutant Apes, and the least talked about collection- the Kennel Club. With 103 eth and 23 eth floors respectively, the Bored and Mutant apes get all the attention. For my next high conviction call, I’m calling a massive run up on the lesser known collection of the 3, the Kennel club. For a few reasons I think that over the next 2-3 months there will be a massive supply crunch on these dogs that could very well turn this 8 eth project into a 15+ eth project. Let’s dive into the main reasons why the Bored Ape Kennel Club joins the ranks of Sandbox (9x gains), Creepz (30x gains), and Look Labs (5x gains) on my list of high conviction calls.
My thesis is 2 big events plus several tailwinds will lead to a massive supply shock in the next 3 months. First, staking is launching in the next 12-16 weeks. This hasn’t been formally talked about yet but several staking methods are being voted on by the APE community. In all of these proposals the Kennel Club is being used as a way to increase staking returns. By pairing a dog with a mutant or a bored ape you increase the amount of APE coin you get in return. In my opinion once this information goes mainstream and is formally announced, there will be a mad scramble by mutant and bored ape owners to purchase dogs to pair up with their apes. Here’s where things get interesting, there are only 9,600 Kennel Clubs NFT’s. There are 10,000 bored apes and 20,000 mutants. Owners will be fighting to pair those 9,600 dogs with their 30,000 apes. This will lead to a massive supply shock. We saw this happen when the initial APE coin airdrop happened. We will see this again leading up to the staking functionality.
Next, the short term roadmap for the BAYC ecosystem includes 2 items I predict will heavily feature the kennel club. If you look at the above official roadmap, there are 2 landmarks that hint at including dogs. First at the middle top (MD vs MMI) and then again on the middle right (Final Battle). Both include pictures of a furry paw. If I was to hazard a guess I’d say one is a new game featuring the kennel club vs some sort of robot kennel club and the other might be a collection of robot kennel clubs for kennel club owners (complete educated guess). You have to think there is a very high likelihood that the kennel club is in some sort of way involved with these items due to the paw on the map. With absolutely no utility the kennel club is at 8 eth. My prediction is that once this utility is announced the scramble to pick up this lower supply collection with great unique ownership will again drive a supply shock.
At the time of writing Bored Apes are at a 103 eth floor. Mutants are at 22 eth. The Kennel Club is at 8 eth, by far the cheapest entry point to the ecosystem. The next reason I’d like to go over why I think the Kennel Club is destined for price appreciation is that I think as the Bored Ape brand grows, most new entrants will opt for the cheapest collection of the 3, the Kennel Club. While 8 eth or $24,000 is far from affordable for the average consumer, it is the most reasonable for investors who might be feeling some FOMO for not being in the BAYC ecosystem. While I believe this will be the smallest factor of the 3 I’ve covered in this article, I think it will be yet another tailwind on the floor price and yet another factor adding to the upcoming supply crunch.
As I do with any of my research articles I want to cover counter points. As much as I can I like to challenge all of my assumptions. I think there could be a couple reasons the price depreciates instead of appreciates over the next couple of months. First, at the time of writing both the Bored apes and Mutant apes are near all time highs. Typically all 3 collections in the BAYC ecosystem generally move together. With those prices being near all time highs, there’s risk some investors will start to take profits, driving the price down for the Kennel Club with it. I typically like to invest in assets that are near lows not highs. Secondly, my thesis is largely dependent on predictions rather than facts. The staking vote has not finished yet so there is a chance (although improbable) that staking doesn’t happen in the short term. Also, my roadmap predictions are more of educated guesses than 100% probability. If any of these predictions don’t hold true, it can cause selling instead of buying. Everything I just listed are realistic scenarios to keep in mind when investing.
The BAYC ecosystem is by far the most prestigious and sought after brand in NFT’s. I believe all 3 collections are destined to keep appreciating. It is in my opinion though over the next 2-3 months the Kennel Club will see better returns than the other 2 collections. My personal play here is to purchase 2 kennel clubs, one to keep and one to flip, hopefully paying for my entire cost basis. Even if my predictions of tailwind events don’t come true, I think there is still a very good chance just because it is in the Bored Ape family its price will remain high. I wrote this article not to convince you to buy this asset, but to hopefully teach you a little about how I do research and make investment decisions. If you found this article informative and would like more research in your inbox, feel free to subscribe to my absolutely free newsletter. Also engage me on Twitter if you have any feedback, would love to hear from the community.