Just when you thought meme coins were over, along comes Bonk (BONK), the new dog-themed meme coin that started trading at the very end of 2022. Bonk has had two price spikes in the first week of trading in 2023, and some people are already calling it the next Shiba Inu (SHIB -2.12%).
Although there are certainly similarities between Bonk and Shiba Inu, there is reason to be skeptical about any meme coin, especially one as new as Bonk. Here's what you need to know about Bonk.
Similarities to Shiba Inu
Let's start with the obvious similarity -- the Bonk mascot is a lovable Shiba Inu dog. As such, Bonk is the latest in a long line of dog-themed meme coins that started with Dogecoin.
Image source: Getty Images.
Another big similarity is that Bonk has a huge supply of 100 trillion coins, of which about 50 trillion are currently circulating after an initial airdrop to the Solana (SOL -2.19%) community. By way of comparison, Shiba Inu has a circulating supply of 549 trillion. These gigantic coin circulations lead to huge market capitalizations and attract attention quickly. Quite simply, any number multiplied by 100 trillion is going to be big. Right now, Shiba Inu has a market capitalization of $4.5 billion, while Bonk has a market cap of almost $100 million.
Another important similarity to Shiba Inu is that both coins are meant to be entertaining They aren't meant to provide serious utility, and they are primarily intended for retail investors who enjoy trading crypto. The Bonk white paper specifically mentioned the need for a new "fun" coin in the wake of all the negativity around failed crypto exchange FTX and its related hedge fund Alameda, not to mention the broader crypto winter. Bonk claims that is the first dog coin "for the people, by the people." Apparently, this is not a coin for the serious, buttoned-down folks on Wall Street.
The Solana meme coin angle
Although Shiba Inu is a crypto token minted on the Ethereum blockchain, Bonk is a crypto token minted on the Solana blockchain. That's why many people are describing this as a "Solana meme coin." In addition, Bonk was specifically created for members of the Solana community. On Dec. 24, the coin was only airdropped to people active in the Solana community, such as creators of new Solana non-fungible token (NFT) collections and Solana developers. Thus, when trading started soon thereafter, the only people who could trade Bonk had a relationship of some kind with Solana.
The easiest way to buy Bonk is via decentralized exchanges built on top of the Solana blockchain. If you go to CoinMarketCap, you can see a list of exchanges that now offer trading in Bonk, some of which have deep relationships with Solana. This helps to explain why Solana has also had a mini-surge the past few days. Bonk mania is getting people talking about Solana again.
Will the Bonk rally last?
Bonk was up 5,000% at one point, so some people who lost a lot on Solana last year are probably already dreaming of a future in which they make up all their losses with a quick meme coin surge. Others are probably hopeful that Solana can finally remove itself from all the unwanted negative attention stemming from its previous relationship with disgraced FTX chief Sam Bankman-Fried, who helped to fund and promote the crypto.
However, across social media, some people are already saying the Bonk rally is over. Plenty of dog-themed meme coins have tried to become "the next Dogecoin" or "the next Shiba Inu" and failed. In 2022, for example, Tamadoge briefly stirred up investor excitement as the next Dogecoin. So I find it very unlikely that Bonk is going to do what other coins have not.
I cannot recommend Bonk, which seems too speculative for most retail investors. Until Bonk builds out more utility and provides a real long-term plan that is more than just a marketing event, I'm deeply skeptical. That said, Bonk could still help to bring attention to all the exciting projects, creators, and developers within the Solana community, and that could help to boost the fortunes of Solana. I'm excited to see what Solana has planned for 2023 as a way of restoring trust with investors who got burned last year.