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“ ‘Unfortunately a lot of retail punters are going to lose money on dogecoin in the long term because there’s really not much there in terms of interesting technology.’ ”
That’s Nic Carter on CNBC on Wednesday explaining the potential perils of piling into dogecoin, as a number of celebrities and captains of industry have been touting the cryptocurrency that was created as a joke back in 2013.
Read: Should I buy dogecoin? Why prices of the cryptocurrency are surging—but risky
Carter underscored to CNBC’s Europe affiliate the fact that is widely understood in the crypto community that dogecoin has no utility, as many cryptocurrencies claim to, and was ultimately engineered as a gag.
“The only thing it can really do is be zombified and stick around and be an empty shell for people’s expectations and for their entertainment” he told the business network.
The comments from the venture capitalist who founded Castle Island Ventures with Matt Walsh and has recently raised some $50 million in funding for a new crypto-focused fund, come as Tesla Inc. CEO Elon Musk has been touting dogecoin for weeks, helping to spur fresh interest in the crypto asset and driving its value parabolically higher.
Dogecoin has surged 140% over the past seven-day period, with that rally helping to push it into the top 10 among cryptos, according to data site CoinMarketCap.com.
Bitcoin BTCUSD, -0.11% is the world’s most popular cryptocurrency, boasting a market value over $830 billion.
Dogecoin co-founder Billy Markus told The Wall Street Journal in an article at the beginning of February that he created the asset in 2012 as a “lighthearted cryptocurrency,” then known as Bells, to serve as the fun version of bitcoin. According to the newspaper, fellow dogecoin co-founder Jackson Palmer shared his idea for a cryptocurrency based on the shiba inu meme, and Markus reconfigured his code for Bells to fit the meme.
But since December, Musk has been blasting out bullish tweets on dogecoin, which, in turn, has garnered the quirky crypto more attention among other celebrities.
As recently as Wednesday, A Twitter account associated with Musk tweeted that “he bought some dogecoin for Lil X, so he can be a toddler hodler,” referring to the practice of hodling, or holding on to a crypto despite downturns with the hopes of enjoying big gains in the longer run.
At last check, dogecoin was trading at 0.0699 cents, down 12%, but had been changing hands back in late January at less than a penny, costing 0.007 cent.
The rise in the crypto is raising concerns that it will ultimately collapse in price again and saddle a number of new investors with massive losses.
Interest in dogecoin also comes as bitcoin’s have been trading near records, also partly off recent moves by Musk’s Tesla, which announced a $1.5 billion investment in the more serious crypto asset.
Bitcoin is up some 53% so far this year, while the Dow Jones Industrial Average DJIA, +0.20% has advanced 2.5%. The S&P 500 SPX, -0.03% climbed nearly 4% in 2021 thus far.
Carter referred to Musk’s recent move to buy bitcoin as a big step forward for the crypto world but described his championing of dogecoin as “disconcerting.”
“It’s somewhat disconcerting to see Elon Musk so enthusiastic about it,” the Castle Island co-founder said. He also noted that the original developers of dogecoin aren’t updating the technology that underpins the digital asset so nothing new is likely to come of it.
Check out Carter’s CNBC interview.
