Dogecoin nears 75 cents, then slips as crypto pioneer Silbert seen betting against parody coin ahead of Elon Musk’s ‘SNL’ guest-host gig
Call it the “dogefather” versus the godfather of crypto.
Barry Silbert, a power player in the digital-asset sector, said he’s betting against dogecoin DOGEUSD, +0.32% and is urging investors in one of the hottest trades in 2021 to convert their doge holdings into bitcoin BTCUSD, -0.81% .
The missive from Silbert comes as the chief executive of Tesla Inc. TSLA, +1.33% and SpaceX and one of dogecoin’s most vocal champions, Elon Musk, is set to guest host NBC’s late night comedy sketch show “Saturday Night Live.”
Check out: As dogecoin price tops 60 cents, Elon Musk says ‘please invest with caution’ ahead of ‘Saturday Night Live’ guest-host gig
Fans of dogecoin are hopeful that the Tesla CEO may offer a bullish word or two on the doge, which was created in 2013 as a lighthearted riff on bitcoin, but has now taken on different significance amid a nearly 14,000% surge in value in 2021.
At last check Saturday evening, dogecoin was changing hands at 63.9 cents on CoinDesk, off about 14% from its 24-hour peak at 74.08 cents.
Some view the asset as the perfect example of an asset bubble.
Musk, however, on April 28 declared himself the dogefather, ahead of the ‘SNL’ spot.
Dogecoin’s moves have been primarily pegged to Musk’s comments in social media, in recent weeks and months.
Silbert is considered a luminary in the world of digital assets, after founding two of the most widely known enterprises in crypto: Grayscale Investments, which runs the popular Grayscale Bitcoin Trust GBTC, +3.71% ; and the Digital Currency Group, which also owns CoinDesk. He’s also been an early investor in companies like trading platform Coinbase Global COIN, +2.70% and Ripple, a blockchain-focused startup behind the cryptocurrency XRP XRPUSD, +1.61% . CoinTelegraph ranks Silbert as the No. 5 most important person in decentralized digital assets.
Read: Dogecoin price’s ‘make-or-break’ moment looms with Elon Musk set to host ‘Saturday Night Live’
Silbert’s tweet effectively creates a face-off between billionaire investors.
Musk boasts a networth of $166 billion, while the DCG founder’s networth is $1.6 billion, according to Forbes.
Doge devotees have very publicly set a target of $1 for the coin in 2021, a number that might seem extremely modest at first glance but not when viewed through the lens that Doge traded at $0.005 on the final day of 2020.
Even more bullish dogecoin holders, view their price targets at $5 and beyond.
Interest in dogecoin can’t really be overstated. In Google trends over the past week, it has eclipsed searches for COVID and coronavirus and Elon Musk’s appearance on “Saturday Night Live” is trending on Twitter.
So far, the meme currency has enjoyed a spectacular ride compared against most other assets. Gold futures GC00, +0.04% are down 3% so far this year, the Dow Jones Industrial Average DJIA, +0.66% and the S&P 500 index SPX, +0.74% are up by nearly 13% in 2021, while the Nasdaq Composite Index COMP, +0.88% has gained about over 6% so far this year.
However, even Musk offered a note of warning on Friday, suggesting that investors buy cautiously.
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Nic Carter’s first foray into digital currencies was mining Dogecoin in his university dorm room back in 2013.
Created as a joke with the Shiba Inu dog breed as its logo, the meme-inspired token seemed more fun than Bitcoin and its community of diehards.
The 28-year-old now runs a crypto data provider that counts Goldman Sachs Group Inc. among its investors. He’s lost access to a trove of Dogecoin that has surged roughly 200,000 per cent since the token’s inception. But like many industry pros, these days he has little affection for the coin – and has lost no sleep over his trapped profits.
“There’s this parallel industry of people that are just interested in running glorified bucket shops,” said Carter, co-founder of Coin Metrics based in Boston. “For most of us, we’re in this for ideological reasons. It doesn’t really affect us.”
The Dogecoin frenzy is reaching fever pitch as Elon Musk prepares to host Saturday Night Live with speculation he’s poised to talk up his beloved token. Coinbase Global Inc., the largest U.S. digital-asset exchange, plunged to a record low Thursday partly because it doesn’t offer enough speculative coins like Dogecoin. Robinhood, a trading app that offers the token, reclaimed the top spot on Apple’s U.S. App Store.
While its meteoric rise mirrors that of Bitcoin, crypto purists like Carter fear it’s a distraction from their grand project of deploying blockchain technology to revolutionize modern finance with everything from decentralized currencies to tokenized art. For those trying to lure big money into the industry with old-school risk controls, the memecoin doesn’t help institutions take crypto seriously while being far too risky for portfolios.
At BKCoin Capital, a US$60 million quant fund, founding principal Kevin Kang says Dogecoin is off-limits.
“This could well be a ‘sell-the-news’ event where large holders sell before his appearance on SNL, leaving retail investors with the losses,” he wrote in an email, referring to Musk. “There’s nothing beyond this speculative asset – there are no developers on it, and we’ve not seen ‘smart money’ or institutional investors allocating.”
Bitwise Asset Management didn’t include the token in a a US$1.1 billion index fund tracking the 10 largest cryptocurrencies even though it’s now the world’s fourth largest worth US$79 billion.
Before Gemini – a crypto firm founded by the Winklevoss twins – announced Tuesday that it would support the coin, none of Bitwise’s custodians would touch the token. That meant the firm couldn’t be confident its holdings were safe for its more conservative clients.
“There are concerns that its spectacular rise suggests that the market is somehow overheated,” said Matt Hougan, an expert in exchange-traded funds who’s now chief investment officer at Bitwise. “To the extent that some quarter of the internet community wants Dogecoin to exist and will use it among themselves, I think that’s beautiful. But I don’t think it threatens the institutional global scale of Bitcoin.”
Dogecoin surged 96 per cent in the past week, Coinmarketcap data show, a move largely seen as the epitome of a speculative frenzy spurred by massive stimulus spending and social-media chatter. Over the same period, Bitcoin has risen 4 per cent.
Even Musk on Friday urged his followers on Twitter to “invest with caution,” linking to an earlier video in which he said crypto should be considered speculation for now.
While outsiders might paint all digital assets with the broad stroke of newfangled excesses, critics in the know see fundamental distinctions.
Whereas Bitcoin was the pioneer for distributed ledger technology, Dogecoin grew out of that. There’s also little coding activity on the latter, a sign of stagnation to critics. Unlike Bitcoin, supply isn’t finite, and there are still relatively few Dogecoin transactions, a symptom of its essentially speculative nature.
“There are question marks around the general status of the software around Dogecoin,” said Konstantin Richter, chief executive officer and founder at Blockdaemon, a blockchain infrastructure provider. “It’ll catch up. If Doge is super valuable and people can make money building applications on it, they will.”
There are some cases where perhaps the buzz can inspire practical use. Mark Cuban, the billionaire owner of the Dallas Mavericks and Dogecoin booster, said at the Ethereal Summit on Thursday the basketball team has sold more merchandise denominated in the token than it did for years in Bitcoin.
For crypto faithfuls, it can be hard to champion one but dismiss the other. After all, it’s difficult to tell if digital assets such as Ethereum or Uniswap that do have use cases are growing for technological reasons, ideological ones or simply because a deluge of cash has flooded the nascent industry.
In any case, the very pointlessness of Dogecoin is no matter for some funds – as long as there’s volatility. At YRD Capital, a fund that allocates to algorithmic strategies, co-founder Yuval Reisman says its traders recently jumped on board to profit from the gap between Dogecoin’s spot rate and futures.
For Carter at Coin Metrics, now four years into his crypto career with some 137,200 Twitter followers, the rebel has become the establishment. He observed that Dogecoin has appealed largely to younger people who trade on Robinhood, follow TikTok rather than Twitter and find Bitcoin old-fashioned. He also reckons it’s won new fans because its low unit price – 61 cents – makes it seem less intimidating than Bitcoin at US$57,340 though day traders can buy just a fraction of the latter.
Recalling the Dogecoin he still owns somewhere, Carter stresses that Bitcoin loyalists like him feel no regret about ignoring the puppy.
“You have to make peace with the fact that nonsense is going to go up all the time,” he said. “That’s not my concern. My concern is making Bitcoin as robust and functional as possible.”
Dogecoin: Barefoot Investor’s warning over Elon Musk’s favourite crypto
Digital currencies have exploded in recent years, here’s a simple guide to tell BNBs from BTCs.
Digital currencies have exploded in recent years, here’s a simple guide to tell BNBs from BTCs….
Scott Pape, better known as the Barefoot Investor, has issued a word of warning to his followers who are considering investing in the red-hot cryptocurrency Dogecoin.
Dogecoin, a digital currency created by Australia’s Jackson Palmer that was launched in 2013 and takes its logo from a popular meme known as Doge, has seen its value soar to record heights in recent days.
It’s a phenomenon some analysts are putting down to the continued public promotion its received from billionaire Tesla founder Elon Musk.
Musk, who has over 53 million Twitter followers, is hosting popular American TV show Saturday Night Live this weekend and this appearance — combined with Musk’s regular tweets about Dogecoin — has seen its price skyrocket.
Investors who held $US1000 ($A1280) of the currency on January 1 would have $US112,500 ($A144,500) in their wallets as of Wednesday night.
It’s incredible growth but best-selling financial advice author Pape, in an email to his subscribers late last month, could not have been more emphatic in his rejection of Dogecoin as an investment play.
While conceding Dogecoin was the best-performing cryptocurrency over the past six years — far outstripping the likes of Bitcoin and Ethereum — Pape noted it was “set up as a piss-take by its Aussie founder” and had “zero tangible value”.
“It is worthless,” he wrote. “So do I feel a twinge of regret for not getting in? No.
“For much the same reason that I’ve never contemplated putting one per cent of my net worth into the pokies (Just in case, you know, I win the jackpot).
“Here’s the point: Life is really hard when you believe you can make a quick buck from magical dog memes.
“It’s stressful being a gambler. There is no skill involved, and the odds are stacked against you.
“You see, in order to make real money you have to sell. And every man and his dog is planning to sell out of Dogecoin right at the top. Every single one of them.
“It’s called the ‘greater fool theory’ (i.e. you only win when some greater fool buys in at a higher price), and history is littered with people who abruptly discovered that they in fact were the fool.”
“If you’re persuaded to sell your boring index funds and lay down with dogs, I can almost guarantee you’ll eventually end up with financial fleas,” Pape added.
After pumping up Dogecoin’s popularity for months, Musk also warned investors to be wary of cryptocurrencies ahead of his Saturday Night Live debut.
“Cryptocurrency is promising, but please invest with caution!” the Tesla CEO tweeted early Friday morning.
The rare investment warning from Musk comes as the price of Dogecoin — a cryptocurrency represented by a Shiba Inu meme — has soared to about 60 cents per token, according to CoinDesk data.
It’s up a whopping 10,400 per cent since January 1, CoinDesk data shows.
“Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk’s hosting of Saturday Night Live,” Edward Moya, senior market analyst at Oanda, wrote on Tuesday.
— with New York Post