A Little Gamble?
Generally, I steer clear of memecoins, and for a good reason. Aside from DOGE, I have not ventured much into this particular sector. Being an early investor, I have a soft spot for some of the older coins, such as DOGE. However, I look at the current memecoin market in another way. Most of these coins are driven purely by speculation and have little to offer regarding utility and longevity.
However, a handful of these coins secure dedicated communities and even “limited” use cases. A particular memecoin recently appeared on my radar due to its impressive performance over the past two weeks. BONK is up by almost 200% over 14 days. I remember when this memecoin initially launched, there was a fair amount of hype surrounding it.
This was primarily because it is a memecoin on the Solana blockchain. Once again, this is the dynamic behind the recent pump. Solana has rallied 46% in the same time frame and is one of the top-performing blue chips alongside LINK. Injective Protocol has also performed phenomenally well, but I wouldn’t classify it as a blue chip. However, in my opinion, that is soon to change.
Due to its strong correlation and relativity to Solana, I view BONK as the equivalent of a “leveraged” investment in Solana without the risk of liquidation. This particular aspect has encouraged me to begin building a somewhat modest position. As always, my standard rule of practice is to increase allocation during severe corrections. There are still enormous corrections, even once the bull market kicks off.
The only difference is that hungry retail investors aggressively buy up these dips, and they tend to be short-lived. Even at this early stage, I consider deep corrections buying opportunities. If not now, then when? Due to BONK’s risk/reward ratio, I don’t envision much capital allocation in terms of my investment—the deployment of capital needs to match the risk/reward ratio.
Many newer investors are ignorant of this practice and usually pay the price. However, one solid winner can work wonders for your portfolio. I prefer to be on the “calculated structure” side rather than relying on luck.
Relativity & Market Cap
This is always key, and looking at BONK’s market cap, one can still expect a significant upside. At the time of writing, BONK has a market cap of approximately $24 million and a daily trading volume of roughly $6 million. According to CoinGecko, the most actively traded market is BingX. BONK is currently 545% above its all-time low. It’s a pretty good entry point, considering that 200% of this appreciation has occurred over the past two weeks.
This is mainly due to the market cap size. It would not be as attractive if BONK had a larger market cap. Everything in markets is relative, and it’s essential always to factor that into every investment decision. This is especially true of speculative investments. Considering that a memecoin like FLOKI has a market cap of $355 million, BONK looks pretty attractive at these valuations.
Final Thoughts
Memecoins are not my investment vehicle of choice. However, BONK should not be as much of a gamble as many other memecoins in the marketplace due to the abovementioned points. DOGE and SHIB are in an entirely different class. However, I want to take more of a speculative gamble with BONK. It’s a bit of a fun experiment, more than anything else.
Hopefully, it will rally along with Solana in the bull market. Referring to the previous two weeks, BONK has multiplied Solana’s performance by 4X. This does not guarantee future performance, but it’s encouraging, nonetheless. Remember, memecoins are incredibly risky. Always conduct your own research and due diligence. See you next time!
Sapphire Crypto 