- Bonk is a meme coin launched on Solana on Christmas Day
- It has surged by nearly 2,500%
- Solana has meanwhile suffered a collapse after associations with Sam Bankman-Fried and major projects fleeing the blockchain
- Our analyst says this is not the environment for memecoin hysteria
Once again the story repeats. Twitter is buzzing this week about Bonk, a dog-themed token on the Solana blockchain. There’s a nostalgic feeling to seeing a classic meme token resurface — add a COVID mask and a few Elon Musk tweets and the market feels like 2020 all over again.
The Shiba-Inu–style token was issued on Christmas Day and has climbed roughly 2,500% since then. As I write, the price is up about 150% in the last hour alone.
What makes this particularly notable is that the token launched on Solana, a chain that has struggled badly in recent months. I wrote a deep-dive yesterday analyzing Solana’s decline, driven by several top projects leaving the chain, repeated outages that caused major disruptions, and the damaging association with Sam Bankman-Fried, all of which pressured the price down.
Although Solana has still experienced a significant drop overall, the chain has seen some recovery tied to the Bonk spike. Solana bounced back above $13 on Tuesday after falling as low as $8 last week. Coinglass data shows nearly $7 million in short positions were liquidated — the largest amount since the FTX collapse in November.
The Layer 1 appears to be benefiting from renewed attention around Bonk, which fueled the hype by announcing a large airdrop of 50% of the supply. It worked — Bonk now has a market capitalization near $120 million and follows the standard meme-coin playbook closely.
Why is Bonk rising?
As with any meme coin, pinning down the exact reason for the rise is difficult. It comes down to marketing and luck. Several Solana projects have even integrated Bonk as a payment token, while $BONK has trended relentlessly on Twitter.
This mirrors the same frenzy we’ve seen over the past few years. Everyone now understands that meme coins are effectively pure speculation. What makes this episode unusual is that the rally happens at a broadly bearish moment for Solana and for markets overall.
Over the past year, interest rates have risen and liquidity has been withdrawn from markets, which has caused risk assets to tumble. There is nothing more speculative than meme coins, and many of them have already collapsed as a result.
What’s next for Bonk?
My advice to any investor (or gambler) is that Bonk is an extremely risky bet, like any meme coin. It has no intrinsic utility, and over the long term the token is likely to decline toward zero.
Of course, everyone understands that reality — these are memes, after all. But in the current tight monetary environment, the pandemic-era hysteria when retail investors with stimulus checks pumped every token in sight is long gone. This is not the climate for gambling on meme coins, and that’s before considering Solana’s recent troubles.