Book of Meme secures $100m presale as Solana becomes 4th largest crypto

The Solana-based Book of Meme (BOME) memecoin has reached $100 million in presales, contributing to Solana’s rise as the fourth-largest cryptocurrency by market capitalization and driving a market-wide uptick in Bitcoin and Ethereum prices after a brief weekend dip.

Book of Meme is a memecoin on the Solana network launched by the pseudonymous artist Darkfarm1. Over the past 56 hours, the token has rallied over 36,000% and has a market capitalization of $1.45 billion.

Analysts believe that the memecoin’s success can be largely attributed to its controversial presale model, which involves investors sending funds (note: similar to crowdfunding) to a wallet address in exchange for a weighted distribution of tokens once it goes live.

Cautionary tales

However, some experts caution that this model carries significant risks, as investors are not guaranteed to receive tokens in return. Despite the concerns, the success of Book of Meme and other memecoins on Solana has caught the attention of prominent figures well outside of crypto communities on X.

David Sacks, co-host of the All In podcast, responded to comments on another memecoin named after him ($SACKS), clarifying that he didn’t shill his own memecoin, nor did he create the $SACKS smart contract. Sacks only affirmed that he was “happy” that the kid he mentions in the tweet was able to pay their student debt by raising their Solana from 1 to 200 in an hour.

Tesla CEO Elon Musk, who recently said “ok fine, I will buy ur coin” to another All In podcast host Jason Calcanis, caused the affiliated $JASON coin to surge.

Anthony Sassano, an angel investor and Ethereum educator, likened presale models to “bidding ponzis” which have “a 99.9% chance of rugging.”

Another cautionary message from pseudonymous Web3Alert founder Nick tries to identify the “biggest problem with meme coins” with how “everyone expects every project to move just as fast and just as volatile.”

“Instant gratification is something you learn, that’s exactly what meme coins are teaching,” Nick states.

The surge in demand for Solana-based memecoins such as BOME, NAP, and NOS (Nostalgia) has propelled the network to become the fourth-largest cryptocurrency by market capitalization.

Top movers in the memecoin space included Shiba Inu (SHIB), up 10.8%, DogWifHat (WIF), up 30%, and CORGIAI, up 8.5%. The tokens behind the chains these memecoins are issued on are also headed upwards, with Solana’s SOL up 10.8% to $205 and Avalanche’s AVAX up 15% to $61, according to indexed data from CoinGecko.

By extension, the general crypto market also experienced a significant uptick. Bitcoin and Ethereum recently saw a dip over the past weekend, but by Monday’s Asian trading hours, BTC was back at the $68.5k level, while Ethereum saw $3,600 levels stabilizing over 72 hours.

Macroeconomic factors affecting memecoin surge

This volatility is attributed to the arrival of new regulatory frameworks from the Federal Open Market Committee (FOMC).

However, while macroeconomic policies set by the FOMC often affect Bitcoin and other cryptocurrencies, the extent of its influence may be viewed as negligible. According to a 2020 study conducted by Sujin Pyo and Jaewook Lee, the price change after an FOMC announcement is “insignificant, indicating that the effect is negligible.”

The authors of this study also note that their findings are consistent with the pre-FOMC announcement drift phenomenon. The study was funded by the National Research Foundation of Korea.

Recent US economic data indicates persistent inflation, leading to higher interest rates and a stronger dollar, which fares poorly for risk assets. The next FOMC meeting is in roughly two days, and the current target rate is 525-550. According to data from the CME Group’s FedWatch Tool, there is a 99% chance of interest rates remaining unchanged.