Another Bull Market, Another Fad Memecoin

Froth is an inevitable side effect of a crypto bull market — with wild excesses beginning to emerge as opportunistic traders look for The Next Big Thing.

And while there have been some efforts to par down the imagery of private jets and Lamborghinis, the industry has been unable to shake off its addiction to memecoins.

Dogecoin and Shiba Inu were the big beneficiaries of the last bull run, delivering eye-popping returns as everyday consumers piled in — hoping for a piece of the action.

This time around, it's a hastily created altcoin called Peanut the Squirrel that's captured the imagination of degens — delivering staggering price growth of 3,161% in a little under two weeks.

As with many other memecoins these days, PNUT's origins are centered on real-world news events.

Peanut had gone viral on social media, commanding hundreds of thousands of followers on Instagram and TikTok.

But at the end of October, the squirrel was seized by officials amid complaints a man in New York may have been keeping it illegally — and in a potentially unsafe way.

Peanut was euthanized after biting a worker from the Department of Environmental Conservation — prompting a widespread backlash — but ultimately ended up testing negative for rabies.

There are some differences between DOGE and PNUT.

Dogecoin's community had a strong track record of raising money for charity — and trying to give back. Funds were raised to build water wells in Kenya and even get the Jamaican bobsleigh team to the Winter Olympics, a nod to the Disney film Cool Runnings.

And while you might think that PNUT could serve as a good opportunity to support animal welfare charities, the coin's website makes no mention of philanthropy. Instead, the project's only stated name is to... er... get a SpaceX rocket named after it.

Ultimately, PNUT is nothing more than a ploy to make money, with no utility or values to speak of despite its $1.7 billion market cap.

The project's aligned itself closely with Donald Trump and Elon Musk, with its X account making lofty claims that this squirrel's death directly contributed to his re-election.

Frenzied trading in recent days has been linked to now-debunked claims that Trump's crypto wallet had received 1.7% of PNUT's total supply. While the post on Cointelegraph's page quickly went viral, data from Arkham Intelligence proved this wasn't true.

"The Binance effect" also explains why this cryptocurrency has surged by more than 300% over the past 24 hours, with the exchange moving rapidly to list it.

Memecoin proponents argue that tokens like this are a valuable form of expression — and harmless fun. But we all know how this story ends.

In the days to come, PNUT will likely end up getting breathless coverage among national news outlets, prompting a further swell of investment from naive consumers hoping to get rich quick. But by the time they arrive, early adopters will have cashed out. The token's value will crash, leaving those last to the party nursing huge and irrecoverable losses.

That's the thing about cycles. The decline is just as predictable as the surge.