By Muyao Shen
A sudden surge in yet another dog-themed cryptocurrency has turned the meme coin into the hottest topic in the digital-asset world.
Bonk Inu, created by anonymous developers as a joke after the collapse of the FTX exchange and its sister trading firm Alameda Research, has soared by nearly 1000 per cent in the past month, giving it a $US1.7 billion ($2.5 billion) market capitalisation, according to data from CoinGecko. The token, which reached an all-time high a week ago, still trades at just a fraction of a cent.
The token was launched last December on the Solana blockchain that FTX co-founder Sam Bankman-Fried had been a big supporter, with a goal of becoming “the dog coin of the people”, according to its website. Dogecoin, which features a Shiba Inu, has long been championed by Elon Musk. Solana itself has emerged from under the cloud Bankman-Fried’s downfall cast over crypto, with its SOL token rallying more than 600 per cent this year.
“It’s the dog coin of Solana and Solana has been the darling of 2023,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “We’re watching a very similar reality to that of [Ethereum] in 2018 and 2019.”
Meme coins have long been a phenomenon among retail crypto investors and promoters, who see the microscopic prices as an opportunity to quickly post huge returns despite the lack of traditional fundamentals. The token Shiba Inu, for example, reached an all-time high about two years ago during the peak of the last bull market and it now has a market value of about $US5.8 billion, according to CoinGecko.
“After their success last cycle, dog coins have emerged as the Schelling point of retail speculation,” said Ryan Watkins, co-founder of digital-asset hedge fund Syncracy Capital. “The most successful of which can simply command the most attention.”
‘As far as what’s in it for retail investors, they think of it as an online casino, but with far better odds of being a winner and hitting it big.’
Ryan Watkins, Syncracy Capital
“As far as what’s in it for retail investors, they think of it as an online casino, but with far better odds of being a winner and hitting it big,” Watkins added.
Watkins noted that BONK’s rise shows that the popularity of dog-themed meme coins has made them a “standard playbook.”
“A blockchain’s base asset rises and creates a wealth effect [and] that wealth is funnelled into a handful of assets in the ecosystem,” said Watkins. “First starting with the category leaders, then trickling down to more speculative projects. Ridiculous as it sounds meme coins have become a staple of every blockchain. So the category leading meme coin, usually a dog, typically benefits from these wealth effects as well.”
BONK’s price appreciation even appears to have helped boost the sale of the once struggling Solana Android mobile phone Saga. Owners of Solana’s Saga phone can receive BONK tokens for free via a popular scheme known as an airdrop, according to a post on X from Bonk Inu.
With BONK’s price appreciation, people seem to be buying Saga phone in order to receive BONK tokens. Solana’s co-founder Raj Gokal said on X that Saga’s sale have jumped in the past two days.
While the BONK mania hasn’t reached to the level seen for Shiba Inu token and Doge during their heydays, that could soon change with major exchanges such as Binance and Coinbase Global announcing their support for BONK-related trading activities.
“The surge in the Solana ecosystem, fuelled by the recent hints at Coinbase listing, Binance listing, and the potential addition of BONK as a borrowable asset [on Binance], the deep liquidity for it on Solana, has created a compelling narrative around BONK’s future trajectory,” said Jake Kennis, an analyst at blockchain data firm Nansen.