Controversial cryptocurrency mogul Justin Sun smiled as he ate a $6.2 million banana in Hong Kong, a spectacle that raised the spotlight on digital assets as the sector tries to keep a historic market recovery on track.
The banana comes from a viral piece of conceptual art, Comedian, comprised of the fruit taped to a wall, which Sun purchased at a Sotheby’s auction last week. For Sun, conspicuous consumption becomes part of art history, and as the owner of the sculpture, he has the right to manifest the piece with a new banana.
The artwork, like cryptocurrencies, ultimately derives meaning from an underlying idea, Sun said. The Chinese-born tycoon was, until recently, best known as the target of fraud allegations from the US Securities and Exchange Commission. USA, which he rejects. Bridging the gap between memes, cryptocurrencies and art is “very meaningful,” he said in an interview.
Exhibitions like Sun’s event on Friday, regardless of their stated purpose, draw eyes to a crypto market that is do or die at the moment and where retail investors have yet to dive into the latest boom with the intensity evident in the pandemic – perhaps reflecting painful memories of how quickly the 2021 bubble burst.
Investors ‘on the sidelines’
“From a retail perspective, interest is clearly growing as Bitcoin trading has increased significantly,” said Josh Gilbert, market analyst at eToro. “However, we have not yet seen the levels we have seen in previous cycles, which indicates we have a wave of retail investors still sitting on the sidelines and watching.”
When the fear of missing out (FOMO) reaches its peak, the speculative fervor spreads from Bitcoin to smaller tokens, or altcoins. But even though Bitcoin is breaking records and has nearly reached $100,000 with President-elect Donald Trump’s pro-crypto agenda, many altcoins are trading below their highs seen three years ago.
Other relevant metrics include South Korea’s Kimchi premium, which compares the cost of Bitcoin in the country with the offshore price. The premium tends to increase during trading crazes, but is currently completely absent. Elsewhere, a global index of the market for non-fungible tokens – blockchain-based digital collectibles – is languishing at around a fifth of its historic peak.
“Retail FOMO has not returned to 2021 levels,” said Jupiter Zheng, partner at crypto firm HashKey Capital. “Only a portion of altcoins are performing well.”
Some industry participants point to institutional demand for Bitcoin as the initial driving force for the $1 trillion jump in the crypto market triggered by Trump’s Nov. 5 election victory. The president-elect’s platform includes a promise of friendlier regulations and the creation of a strategic Bitcoin stockpile in the US.
FOMO is growing
Others argue that greater engagement from retail investors is already underway, citing the recent record high of popular altcoin Solana, the rise in downloads of cryptocurrency exchange apps and the proliferation of memecoin bombs on social media.
There are “clear signs that retail investors have returned to the crypto market following the election,” said Caroline Bowler, CEO of digital asset exchange BTC Markets Pty. A significant number of accounts inactive since 2020 and 2021 came back to life in November, she said.
Sun, 34, is a consultant for the HTX exchange and creator of the Tron blockchain. The SEC accused Sun of fraud and market manipulation over TRX, a Tron-related token. He said the lawsuit has no merit. Sun recently made waves with a $30 million investment in Trump’s World Liberty Financial crypto project, praising its potential and denying that the move was politically motivated.
Trump has pledged to make the U.S. the global home of crypto and plans to undo a Biden administration crackdown triggered by a 2022 market rout that exposed risky practices and fraudulent activity. This scenario will likely draw more crypto executives into the spotlight.
“I am very optimistic about the Trump administration and its regulation of crypto,” said Sun, who put a banana on his profile on social media platform X. “They understand crypto much more than the previous SEC regulation.”
