SpaceX owner and Tesla CEO Elon Musk (R) gestures as he arrives on the red carpet for the Axel Springer awards ceremony in Berlin on December 1, 2020.
Britta Pedersen | AFP | fake images
Tesla CEO Elon Musk and other celebrities have posted several tweets endorsing dogecoin lately, and some in the crypto world are not impressed.
Nic Carter, a venture capitalist known for his bullish stance on bitcoin, believes Musk’s enthusiasm for the meme-inspired digital token is “baffling” as it is primarily used as a “vehicle for speculation.”
“Unfortunately, a lot of retail bettors are going to 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 you can really do is become a zombie, stay and be an empty shell for people’s expectations and for their entertainment.”
Carter said that dogecoin was what introduced him to cryptocurrencies in 2013 and that while it was “entertaining and fun” at the time, it is now “kind of an empty shell.”
Dogecoin was briefly the 10th virtual currency by market value this week, according to CoinMarketCap data, as tweets from Musk and music industry icons Snoop Dogg and Gene Simmons pushed its 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 once popular “doge” meme, which portrays a shiba inu dog along with multicolored text in comic sans font.
After taking a short two-day break from Twitter, Musk returned to tweet about dogecoin, calling it “the crypto of the people.”
Carter wasn’t the only bitcoin enthusiast to criticize Musk for his comments on dogecoin. Mike Novogratz, CEO of Galaxy Digital, said he wished Musk didn’t make those 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 wildly after members of a Reddit board piled up on the shares very short. .
“It’s a meme,” he said. “It was fun for a bit, but now it’s in a market valuation where people are going to lose a lot of money on the doge.”
“Bitcoin has a real purpose, Etheruem has a real purpose, many of the stablecoins have a real purpose,” Novogratz added. “Doge is a kind of meme, a kind of joke.”
The former hedge fund manager compared Musk’s comments on dogecoin to his infamous “secured funding” tweet in 2018, where he claimed he was considering taking Tesla privately for $ 420. Musk agreed to pay a fine and stepped down as Tesla chairman to settle with the U.S. Securities and Exchange Commission on the matter.
Tesla revealed a $ 1.5 billion investment in bitcoin on Monday, in news that raised the price of the world’s most valuable cryptocurrency to a record high and sparked speculation about whether more major corporations would follow suit.
Carter said that while he found the company’s buying bitcoin “interesting,” he is not advising the companies he has invested in to follow suit.
“I don’t put my startup assets in bitcoin and frankly, I don’t think that’s necessarily the most prudent approach for a CFO,” he said.