The crypto rebound has gained so much speculative vigor that even tokens torpedoed last year by their dependence on the discredited mogul Sam Bankman-Fried have rallied, with some more than doubling this month.
The likes of FTT, Solana, Serum, Maps and Oxygen have surged despite doubts about their viability following Bankman-Fried's arrest on charges including fraud. FTT, the token of his FTX exchange until the latter imploded, is up 160% in January after losing nearly all its value in 2022, CoinGecko data shows.
These so-called Sam Coins have jumped in a wider $250 billion crypto market
The rallies symbolize a revival in risky trades in global markets on bets that steep interest rate hikes are coming to an end. The big question is whether the strong start to the year is a sign of more to come or a treacherous false dawn.
"Crypto will never be free of speculation," said
Solana is a blockchain ecosystem that received high-profile patronage from Bankman-Fried and was once viewed as a rival to ethereum. Questions about Solana's future continue to swirl, yet its related token has leaped past $24 from $10 at the end of December.
Maps is linked to a
No 'value'
"These tokens are likely not to have any fundamental value," said
Crypto watchers Messari said the coins may have popped higher because upward momentum led some market players to rapidly shutter bearish bets.
"Traders tend to short low-value tokens to hedge exposure to the broader crypto market, leading others to try to perform a short squeeze and causing these quick pumps," said
Beyond Sam Coins, the buzz around the viral AI bot ChatGPT has also spilled over to crypto.
Metaverse
The metaverse is getting in on the act too: The coin of the Decentraland
A laundry list of risks remains on the horizon to challenge the sanguine investor sentiment evident in the menagerie of crypto's smaller tokens.
One threat is the possibility of sticky inflation that forces interest rates higher for longer than currently expected, sapping risk appetite. Another danger is the ongoing contagion from FTX's wipeout, most recently the bankruptcy of the crypto lender Genesis Global Holdco.
Digital-asset markets appear to be pausing to figure out what's next. A gauge of the largest 100 coins was little changed Monday as of 6:50 a.m. in London, while the largest token bitcoin was steady at about $22,785.
Bitcoin's 37% climb in January so far is the best for the first month of the year since 2013, helping to take the overall value of crypto tokens past $1 trillion, according to CoinGecko.
