The NFT market was ‘oversold’ and prices fell too far, says Yuga Labs’ new CEO

Bored Ape Yacht Club (BAYC) non-fungible tokens are surging again, fueling hopes of a broader revival in the battered NFT market as speculative appetite returns across crypto.

Floor prices, or the lowest value for the flagship Yuga Labs collection, have climbed from around 5 ETH to 10 ETH over the past month, while apecoin (APE), the ecosystem’s governance token, has also rallied from below $0.10 to about $0.16 with a sharp increase in trading volumes.

The rebound comes as memecoins and other high-risk crypto assets are outperforming more defensive sectors such as decentralized finance (DeFi), suggesting retail traders are perhaps returning to the market after months of subdued activity.

For Yuga Labs’ newly appointed CEO, Michael Figge, the rally reflects more than short-term hype.

“It’s clear from the numbers that for some time, as far as blue-chip digital collectibles go, it was oversold,” Figge told CoinDesk in an interview. “You had this huge compression in price, but if you actually look at an overlay graph, unique holders were actually up.”

Figge, who has held various executive roles at Yuga Labs since 2022, before taking over as CEO last month, argued that NFT prices had become disconnected from user participation during the prolonged downturn.

“A cynic will say prices doubled and the unique holder count didn’t double,” he said. “But that’s really just recovery from a period where things fell disproportionately.”

Survival beyond hype

The rebound also comes alongside a broader reassessment of digital art and onchain ownership beyond short-term price speculation. In an essay last week, pseudonymous collector and NFT market analyst “Van” argued that while the speculative mania surrounding NFTs largely collapsed after 2021, institutional adoption of blockchain-based art has continued quietly in the background. “The speculation died, but the medium survived,” the essay said, pointing to acquisitions and exhibitions from institutions including MoMA, Centre Pompidou and LACMA over the past four years.

The move higher has coincided with renewed momentum in speculative corners of the crypto market. CoinDesk’s MemeCoin Select Index was among the best-performing digital asset sectors last week, outperforming DeFi tokens as traders rotated back into higher-beta bets.

Some market participants also point to growing stress in DeFi as another possible driver behind renewed NFT demand. A string of recent exploits and declining yields across lending protocols have dented confidence in the sector.

“With one well-planned hack, you can lose it all,” Figge said. “That has to get solved in DeFi, but it’s definitely made people rethink the idea that it’s the only use case. NFTs offer something different — they’re tied to communities that persist beyond just price action.”

Signs of renewed activity are also emerging in NFT financial markets. Earlier last week, a $2.8 million NFT-backed loan tied to a CryptoPunk circulated widely on social media, with the lender set to earn roughly $138,000 in interest over 90 days in what traders described as one of the largest NFT-backed loans to date.

The broader NFT rebound has extended beyond BAYC. Pudgy Penguins, another major collection, has also rallied strongly in recent weeks, while traders speculate that OpenSea — the marketplace synonymous with the 2021 NFT boom — could reignite activity through a long-rumored token launch.

‘Back to basics’

Even so, Figge acknowledged that speculation remains central to the market.

“It would be naive to say financial speculation isn’t a huge driver,” he said. “Whatever happens in this cycle will rhyme with the last one, but it’s never going to be exactly the same.”

Yuga Labs has meanwhile shifted its focus back toward community-building efforts, including more than 30 in-person meetups worldwide over the past month.

“A lot of what made Bored Ape work in the first place — the social layer — hasn’t really been serviced in recent years,” Figge said. “We’ve gone back to basics.”