Solana-based meme coin Bonk continues to fall despite the project’s recent destruction of 1.69 trillion BONK tokens.
On Dec. 26, the total supply of BONK — equivalent to 1.69 trillion tokens, valued at over $51 million — was destroyed as part of the dog-themed meme coin’s community holiday token burn event, dubbed “BURNmas.”
Initially proposed in late November, the project plans to burn 1,000 BONK for every post using the hashtag#LetsBONKand 10,000 BONK for every new follower on Instagram and TikTok, with the ultimate goal of burning 1 trillion tokens. The move is intended to promote community participation and increase awareness of the token during the holiday season.
However, due to higher-than-expected engagement on the social media platform, the initial 1 trillion token target was exceeded. In response, BonkDAO members voted in favor of an updated proposal to increase the burn to 1.69 trillion tokens.
Token burns are common in the cryptocurrency space, especially for memecoins like BONK, which had a total token supply of 100 trillion, reduced to 90.97 trillion after the latest burn.
By permanently removing large amounts of tokens from circulation, these events are designed to tighten supply dynamics, theoretically enhancing scarcity and, in turn, the value of a token.
For example, following BONK’s previous token burn event on July 29, 84 million tokens worth over $2 million at the time were removed from circulation, causing the token price to increase by 25%.
However, this time the BURNmas event failed to live up to expectations, and the token price fell by more than 7% after the event, with the market value hovering around $2.3 billion.
Why is the BONK price falling?
While there is no clear reason to sell off, BONK’s decline coincides with the overall downturn in the cryptocurrency market, with Bitcoin’s poor performance triggering risk aversion and struggling to break through the $100,000 mark. In addition, the holiday has led to a decrease in trading activity, and BONK’s trading volume has fallen by more than 8% in the past 24 hours.
Some BONK enthusiasts were also frustrated, expressing dissatisfaction with the team’s failure to execute the token burn on Christmas Day as originally promised. The delay may have eroded investor confidence and led to a sell-off.
Another potential reason for BONK’s decline is that many investors may have shifted their investments to Pudgy Penguins’ token, Pengu (PENGU). Just days after its launch, PENGU’s market cap exceeded $2.2 billion, and even briefly surpassed BONK on December 26 to become the largest meme token on the Solana blockchain.
The token has also outperformed BONK over the past week, gaining over 32% compared to BONK’s 7.2%.
At press time, the coin has formed a magic candle on the daily chart, which is often a sign of whale activity. The sudden price surge has managed to mitigate some of the day’s losses, bringing the coin’s price to $0.000030.
If more investors follow suit, it could spark the next leg up for the memecoin towards the critical resistance level of $0.000034, a level BONK has tested twice this week but failed to break through.