Meda Singh and Lisa Pauline Matakal
(Reuters) – Bitcoin will be indicted in 2023, dragging the cryptocurrency market off the floor and impressing its new memecoin, Bonk.
Top cryptocurrency surges 26% in January, surging 22% in the past week alone, surpassing $20,000 level and on track for best month since October 2021 I’m in.
Ether has also surged 29% this year, pushing the value of the entire global cryptocurrency market to over $1 trillion, according to CoinGecko.
Jake Gordon, an analyst at Bespoke Investment Group, said, referring to the theory that asset prices will return to their long-term averages, “we are seeing a mean-return shape after last year’s tough year for cryptocurrencies.” Stated.
Risky assets overall surged as investors bet on a more optimistic macroeconomic outlook, researchers say.
Few crypto tokens have benefited more than bonk, which launched on the Solana blockchain at the end of December and surged 5,000% by early January. It’s been up 910% since the beginning of the year, but has since fallen.
It’s the latest entrant into the highly volatile world of Memecoin, a cryptocurrency inspired by online memes and jokes, modeled after the same grinning Shiba Inu as Dogecoin. Made famous by Elon Musk’s tweet.
But Bonk is a puppy.
Even at its peak, it had a market cap of around $205 million and was worth just $0.000004873759.
Other meme tokens are also on the rise, with dogecoin and Shiba Inu up 19% and 27% respectively in 2023.
But buyers beware.
“Investors should be extra cautious when it comes to coins like Doge, Shiba Inu and Bonk,” said Les Borsay, co-founder of digital asset services firm Wave Financial.
“They fall as hard as they soar.”
Nevertheless, some market participants cited the relative cheapness of these tokens (Doge is worth about 8 cents) as a reason speculators were willing to gamble.
“Memecoins belong to cryptocurrencies and are part of the culture,” said Martin Leinweber, digital asset product specialist at MarketVector Indexes. “It takes a few lines of code to create a meme token. If you have a meme token community, people will love it.”
Exaggerated rumors of Sol’s death
Bonk is a meme coin with a mission. It was created to support the Solana blockchain, which has seen an outflow of funds and users since crypto exchange FTX filed for bankruptcy in November. has fallen by more than 37%.
The Solana token has actually bounced back as Bonk gained traction, rising 131% in 2023, making it the biggest riser among the major cryptocurrencies.
“Rumors about Solana’s death appear to have been greatly exaggerated,” said Tom Dunleavy, senior research analyst at data firm Messari. “While recent price increases appear to be driven by speculation, the underlying ecosystem is still very strong.”
Graphics: The Return of Crypto https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/klvygzqylvg/chart.png
Too early to invoke crypto reversal
Some researchers believe that the rise of cryptocurrencies has come down to optimism that inflation has peaked and the need for central bank policy tightening has diminished.
“Bitcoin and cryptocurrencies tend to get ahead of everything, so the relative strength of this asset class stands out recently,” said Wave Financial’s Bosai.
Activity has certainly increased.
Data from Blockchain.com show that the dollar value of Bitcoin trading volume on major exchanges jumped to $151 million over a seven-day period, the highest in almost two months.
According to Chainalysis data, total bitcoin flows representing all uses, including transactions and payments, increased by an average of 13,130 bitcoins over the past seven days, the largest increase in 64 days.
However, market watchers cautioned against celebrating too early, noting that trading volumes remained low and the macroeconomic environment uncertain.
“Despite recent strength, it is too early to declare a definitive reversal in the crypto market,” said Aaron Kaplan, co-founder of digital asset securities trading platform Prometheum.
“If interest rate rises fall short of market expectations, risk assets will likely benefit and cryptocurrency prices will likely continue their upward trend, but the uncertainty is too high at this point.”
(Reporting by Meda Singh and Lisa Matakal, Bengaluru; Editing by Pravin Char)