The cryptocurrency surge of the last few days extended into the weekend, with many top coins and tokens continuing their rise on Saturday. The two highest-capitalized meme cryptos, Dogecoin (DOGE -3.20%) and Shiba Inu (SHIB -4.18%), are both coming along for the ride. As of Saturday night, Dogecoin had risen by nearly 9% over the preceding 24 hours, while Shiba Inu was advancing by 7%.
As we’ve seen many times with such rallies, a rising crypto tide lifts most boats. Recent indications that inflation continues to fall have led to speculation that the Federal Reserve will slow or halt its interest rate increases. That’s helping to support the prices of growth assets and speculative investments.
Cryptocurrencies generally fall into that second category, and meme coins — as they have little practical value for much of anything — are particularly speculative. So the ever-volatile Dogecoin and Shiba Inu are hopping right along with the bouncy market.
Compounding this, the opening weeks of 2023 have seen intensifying interest in meme coins and tokens.
Largely, that’s down to the recent airdrop of a new token on the scene, Bonk, which sits on the Solana blockchain. Bonk drew much immediate interest, not least because its developers released 50 trillion of the tokens — 50% of its total supply — in a recent drop. That wild volume instantly made it a big player on the meme coin scene, garnering it much attention.
Since they have little practical utility, nearly all the action around meme coins involves hype and speculation. The emergence of Bonk makes these market segments lively and interesting, but investors need to bear in mind there isn’t much underpinning the value of these assets. Buyer, as always, please beware.