Elon Musk (R), owner of SpaceX and CEO of Tesla, gestures when he arrives on the red carpet for the Axel Springer Awards ceremony in Berlin on December 1, 2020.
Britta Pedersen | AFP | Getty Images
Tesla CEO Elon Musk and other celebrities have posted several tweets supporting dogecoin lately, and some in the world of cryptocurrencies aren’t impressed.
Nic Carter, a venture capitalist known for his bullish stance on bitcoin, believes Musk’s enthusiasm for the meme-inspired digital tab is “baffling,” as it is used primarily as a “vehicle of speculation.”
“Unfortunately, many retail bettors will lose money on dogecoin in the long run because there really isn’t much in terms of interesting technology,” Carter, co-founder of Castle Island Ventures and data firm Coin Metrics, told CNBC. “Street Signs Europe” Wednesday.
“The only thing it can really do is be zombied and stay around and be an empty shell for people’s expectations and for their entertainment.”
Carter said dogecoin was what introduced him to cryptography in 2013 and that while it was “entertaining and fun” at the time, it is now “a kind of empty skin.”
Dogecoin was briefly the No. 10 virtual currency in market value this week, according to CoinMarketCap data, as Musk’s tweets and music industry icons Snoop Dogg and Gene Simmons raised their price to an all-time high.
Created in 2013 by software engineers Billy Markus and Jackson Palmer, dogecoin was intended to be used as a faster, but “fun”, alternative to bitcoin. It is based on the famous “doge” meme, which portrays a shiba inu dog next to multicolored text in font without a font.
After taking a brief two-day break on Twitter, Musk tweeted again about dogecoin, calling it “people’s cryptography.”
Carter was not the only Bitcoin enthusiast to criticize Musk for his comments on dogecoin. Mike Novogratz, CEO of Galaxy Digital, said he wished Musk would not do these tweets.
“Dogecoin reminds me a lot of GameStop,” Novogratz told CNBC’s “Squawk Box” on Monday, referring to the brick-and-mortar video game retailer that saw its shares fluctuate enormously after members of a Reddit board they piled up into very short actions. .
“It’s a meme,” he said. “It was a little fun, but now it’s in a market valuation where people will lose a lot of money in doge.”
“Bitcoin has a real purpose, Etheruem has a real purpose, many of the stablecoins have a real purpose,” Novogratz added. “Doge is kind of a meme, kind of a joke.”
The former hedge fund manager compared Musk’s comments about dogecoin to his infamous “guaranteed-funded” tweet in 2018, where he claimed he was planning to deprive Tesla of $ 420. Musk agreed to pay a fine and left the post of Tesla chairman to settle with the U.S. Securities and Exchange Commission on the issue.
Tesla on Monday unveiled a $ 1.5 billion investment in bitcoins, in news that raised the price of the world’s most valuable cryptocurrency to a record high and sparked speculation about whether more major companies would do the same.
Carter said that while he found the company’s purchase of bitcoins “interesting,” he did not advise the companies in which he has invested to follow suit.
“I don’t put the assets of my startups in bitcoin, and frankly, I don’t necessarily think it’s the most prudent approach for a CFO,” he said.