The surprise in the crypto world in recent days, and undeniably one of the unexpected developments of the year, was inspired by Elon Musk’s fast-talking comment: the unprecedented spike in value of the new Solana-based memecoin called PNUT. For this recently launched token, in the span of just a few days, its market capitalization soared past $120 million with an appeal to both established and new investors.
What Was Behind the Surge of PNUT Memecoin? Being the social media influencer that he is, Musk posted “President @realDonaldTrump will save the squirrels RIP P’Nut” after the death of famous squirrel Peanut, and within what felt like no time, the crypto world was latching onto it. Indirectly mentioning the coin stirred a storm: literally, thousands of investors rushed to PNUT and shot its trading volume through the roof. This goes to prove just how powerful famous figures are over digital assets, especially when it comes to meme-based cryptocurrencies whose popularity generally drives their price more than their technical value or utility.
President @realDonaldTrump will save the squirrels 🐿️ 😢
— Elon Musk (@elonmusk) November 2, 2024
RIP P’Nut pic.twitter.com/yoIBV0Okpd
Musk’s influence on cryptocurrency is not something new. He has earlier stirred up a storm, most notably over Dogecoin, another memecoin that went into high gear after his endorsement. But unlike major coins such as Bitcoin and Ethereum, which already had established use cases and broader adoption, memecoins such as the PNUT are highly volatile and driven by hype. A single tweet or posting from influential personalities can trigger wild spikes in their prices, which more often than not presents high-risk trading with very swift changes in value.
“If you strike me down, I will become more powerful than you could possibly imagine” Obi PNut Kenobi pic.twitter.com/dD2Xo0fSkr
— Elon Musk (@elonmusk) November 2, 2024
Going from almost nothing to over $120 million, the huge jump in PNUT’s market capitalization underlines the speculative nature of memecoins. Investors usually follow these kinds of coins for any short-term gains that drop down just as quickly since they are volatile. Low-entry coins with promises of high returns are what people are attracted to, though it is pretty risky.
For the new investor, this surge has been a heads-up to be very careful around memecoins. Sure, they offer an opportunity for quick profit, but they are volatile and could lose value just as fast. In this case, the price spike is directly related to Musk’s influence-not because of any inherent value of the PNUT. For professional traders, such memecoins as PNUT can provide great opportunities at the same time reminding them about two things: market timing and the fact that sharp price increases do not necessarily make a stable reputation.
The rapid rise of PNUT shows that memecoin space is just as fragile and impulsive as ever, with influencers at the level of Musk capable of causing sharp-angled turns. While his endorsement might give a coin visibility and value, such endorsement also risks investment exposure. As the story of PNUT unfolds, all signs are that social media-driven cryptocurrencies are fast-moving and speculative-might be exciting but unpredictable.
Elon Musk’s tweet was, on one hand, an opportunity, but on the other, it also taught a lesson to the crypto community on how important social media and influential voices are to the ever-changing digital asset landscapes.
