- Bonk is a meme coin launched on Solana on Christmas Day
- It has surged near 2,500%
- Solana, in the meantime, has collapsed following associations with Bankman-Fried and high tasks fleeing the blockchain
- Our Analyst writes that this isn’t the local weather for memecoin hysteria
Woah, this can be a throwback. Twitter is alive this week with discuss of Bonk, a doggy token on the Solana blockchain. There’s something a bit of nostalgic in speaking a couple of good old school meme token. All we want is a COVID masks and a few Elon Musk tweets, and we’d be squarely again in 2020.
The Shiba-Inu themed token was issued on Christmas Day, and has risen near 2,500% since. The worth rise within the final hour as I write that is 150%.
In fact, the intriguing factor right here is that the token has been launched on Solana, which has been struggling mightily over the previous few months. I wrote a deep dive solely yesterday analysing the demise of Solana, with a number of high tasks fleeing the blockchain, repeated outages inflicting large issues, and its ominous affiliation with Sam Bankman-Fried flattening the value.
However whereas it’s nonetheless down massively, Solana has bounced again a bit of together with this surge for Bonk. It jumped again above $13 Tuesday having dipped as little as $8 final week. Taking a look at Coinglass information, there was near $7 million of brief positions liquidated, the biggest quantity since FTX collapsed in November.
The Layer 1 appears to be benefiting from the surge in curiosity for Bonk, which introduced a big airdrop of fifty% of its provide to drive up hype across the coin. It has labored – Bonk now has a market cap of $120 million and is following the meme coin playbook completely.
Why is Bonk rising?
Like all meme coin, it’s troublesome to establish how precisely bonk has pulled this off. It actually comes right down to advertising and luck. Quite a lot of Solana tasks have even built-in Bonk as cost tokens, whereas $BONK has been trending incessantly on Twitter.
All of it quantities to the identical hysteria we noticed during the last couple of years. As everyone is aware of by now, meme cash are nothing however of venture. However what makes this so uncommon is that the rise is going on not solely at a bearish juncture for Solana, however for the market as a complete.
The previous yr has seen rates of interest hiked and liquidity pulled from the market, with danger property collapsing. There may be nothing additional out on the danger spectrum than meme cash, and so they have therefore cratered in consequence.
What subsequent for Bonk?
All I’ll say to any investor (gambler) is that Bonk is a really harmful recreation, like every meme coin. There may be zero utility right here and that signifies that in the long term, the coin is more likely to drop to zero.
In fact, everyone is aware of that anyway, and these are memes we’re speaking about. However within the present tight financial coverage atmosphere, the hysteria of the pandemic, the place stimulus-cheque-wielding retail buyers had been pumping every little thing nearby, is lengthy gone. This isn’t the local weather for gambles like meme cash, and that’s with out even mentioning the carnage with Solana.