Doge, Shiba Inu, Pepe and now Bonk. The latest meme coin darling, BONK, surged 40% after Coinbase announced it would list the token. Binance announced the same move only days later. But why do heavyweight exchanges bother with these joke coins in the first place?
This week, Coinbase and Binance, the two largest cryptocurrency exchanges, stated they would seperately list the Solana-based meme coin Bonk (BONK) on its exchange. The announcement led to a 45% price pump for BONK, with the token reaching $0.000014 on Thursday morning. This comes less than a year after BONK launched in December 2022 aiming to inject some humor into crypto following FTX’s collapse.
Exchanges like Coinbase are selective about which assets they list. So what’s behind these platforms giving meme coins the time of day when there are thousands of more “serious” crypto projects out there?
Meme coins attract tons of interest and trading volume. Where there’s demand, exchanges can profit from a huge windfall in trading fees. Speculation around meme tokens also drives price volatility – meaning more trading opportunities, and therefore more trading fees for exchanges. Through risky bets, traders pile into coins like BONK, SHIB and DOGE looking to catch lightning in a bottle.
A listing on a top exchange like Coinbase brings a sense of legitimacy. This offers traders some comfort compared to buying meme coins on lesser known platforms. Exchanges can pitch themselves as a “safe haven” for dabbling in speculative, hype-driven investments.
After all, if fully-grown adults want to trade digital assets with little intrinsic value, who should stop them? It’s their money. Is it not better to have that trading experience with a known quantity like Coinbase? They would certainly think so.
Meme coins probably don’t classify as securities under US law. That said, the industry is currently unsure as to how the Howey Test is being applied, with cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) seemingly getting a pass. (It’s important to note that there’s disagreement about crypto tokens’ status as non-securities).
Providing this sticks, this gives exchanges added legal clearance to list them. Meme tokens don’t give holders ownership rights or promise profits based on others’ efforts—key factors in determining securities. By explicitly stating buyers shouldn’t expect profits, meme coin creators can further reduce regulatory risk for exchanges and themselves.
As much as people enjoy trading them (and in their defense, they do usually market themselves as frivolous) they do inevitably add to crypto’s reputation as a purely speculative endeavor. It is, when you boil it all down, purely a form of financialized gambling—for good or ill.
With Bonk’s arrival on Coinbase, it joins famous canine cousins Dogecoin (DOGE) and Shiba Inu (SHIB) in the big leagues. According to CoinMarketCap, it currently has the third largest market capitalization of all meme tokens. But whether meme coin mania is a lasting phenomenon or a short-lived fad, exchanges will be counting their money regardless.