Meme coin BONER captured 53% of Hims & Hers tokenized shares on Robinhood, temporarily inflating its price significantly.
Meme Coin BONER Dominates Trading on Robinhood
The meme coin BONER made headlines over the weekend of August 30 by capturing 53% of the tokenized shares for Hims & Hers Health on Robinhood's blockchain. This unusual trading activity temporarily inflated the price of the wrapped stock to $132.64, a stark contrast to the actual closing price of $28.84 on the previous Friday.
Despite the actual stock price of HIMS remaining stable around $29 on Monday, trading activity surged, resulting in $217 million in total trading volume on September 2. The rise in popularity of pairing meme coins with stocks has drawn significant attention from traders.
Tokenized Stocks and Meme Coin Trading
Robinhood Chain, which launched in July, supports the trading of meme coins directly against tokenized stocks, allowing for innovative trading strategies. Tokenized stocks are digital assets designed to reflect the price of their real-world counterparts, and when users buy a meme coin, the associated tokenized stocks are placed into a liquidity pool that dictates the trading price.
In a span of ten days, 31,198 out of 58,714 tokenized HIMS shares were locked into the BONER liquidity pool. Robinhood’s unique structure allows only one licensed partner to mint or burn these tokens, maintaining a limited supply of approximately one tokenized share for every 4,000 real shares. This means that even modest trading activity can lead to significant price movements, especially when the NYSE is closed.
Traders appeared to aim for a short squeeze, a tactic that forces short sellers to buy back shares at higher prices, thereby driving the price up further. HIMS has been a target for short sellers, with around 25% of its shares sold short on the NYSE. However, the BONER website noted that the volume of locked tokenized shares was only a fraction of the total short position.
Emerging Trends and Market Reactions
BONER is not the only meme coin utilizing this trading strategy; others like Artificial Inu, Saylormoon, and Clippy XP have also gained traction, outperforming tokenized stocks in trading volume. Artificial Inu, linked to Nvidia stock, boasts a market cap of $203 million, while Saylormoon and Clippy XP have market caps of $1.75 million and $1.69 million, respectively.
Newer entrants like MEME, associated with AMC stock, have also joined the trend, achieving a market cap of $56 million and a notable trading volume of $73.5 million. However, the liquidity pools for these tokens still represent only a small fraction of the total tokenized stock supply.
Robinhood's CEO, Vlad Tenev, has expressed support for this trend, emphasizing that the platform's blockchain is suitable for meme coin trading. However, he faces backlash from industry figures such as AMC CEO Adam Aron, who criticized Robinhood's tokenization practices as "contemptible" and questioned their legality. In response, Tenev downplayed the concerns, asking, “What’s the concern?”
