Memecoins, notorious for their high volatility, often outperform major cryptocurrencies during market rallies, acting as leveraged bets on overall investor sentiment. Over the weekend, Solana-based Bonk (BONK) led a surge among dog-themed tokens as Bitcoin rebounded above $98,000, recovering from Friday’s dip near $93,000.
According to CoinGecko data, BONK skyrocketed by 30%, while Dogecoin (DOGE), Shiba Inu (SHIB), Dogwifhat (WIF), and Floki (FLOKI) saw gains of up to 20%. On average, dog-themed tokens rose by 8% over the past 24 hours, outperforming the broader crypto market’s 4.5% growth, as measured by the CoinDesk 20 (CD20) index.
While memecoins typically rely on market sentiment for their price movements, certain fundamentals are driving recent gains. Notably, FLOKI has been recognized as a utility token by the U.S. Commodity Futures Trading Commission (CFTC). During a Global Markets Advisory Committee (GMAC) meeting last month, the CFTC proposed a new class of assets called utility tokens. These assets must meet six specific criteria, including providing immediate, consumable utility on a crypto platform while excluding governance or voting functions.
“FLOKI was recently highlighted by the CFTC’s GMAC as a prime example of a utility token. This is a significant milestone and validates our focus on building real-world utility,” said Floki lead developer B in a message to CoinDesk. “With the launch of Floki’s Valhalla metaverse game set for early Q1 2024 and the Floki Trading Bot already generating over $1 million in fees, we’re positioned uniquely in the memecoin space.”
B added that these developments set FLOKI apart from other memecoins, particularly as the market starts placing more emphasis on project fundamentals.
Meanwhile, BONK’s surge is partially driven by strategic token burn initiatives aimed at reducing its circulating supply. BonkDAO, a decentralized autonomous organization managing BONK, burned 100 billion tokens in November and set an ambitious target to burn one trillion tokens by December. Token burns reduce supply, which can create scarcity and potentially drive up prices.
Observers believe BONK is on track to meet its burn target in the coming weeks, further fueling investor optimism and contributing to the token’s recent rally.
