Crypto investment firm Galaxy Digital CEO, ex-hedge fund manager, and billionaire Mike Novogratz has called for caution over dogecoin’s rise, stating the meme-inspired asset has no concrete support.
Speaking to Yahoo Finance, Novogratz said dogecoin’s spike in value is a retail phenomenon due to the supply of more money into the economy by the federal reserve.
Furthermore, Novogratz compared the rise with the GameStop stock that surged to historical highs fuelled by discussions on social media platform Reddit.
The bitcoin bull also warned against putting the asset into a portfolio. According to Novogratz:
“This is very much like GameStop where these meme coins tap into something in the young, new investor base and it becomes fun. It builds on momentum and they want to go after the shorts. I don’t think it is going to have legs because it is all retail, and all of a sudden — there is nobody behind it. No institutions coming in. No strategic buyers. Nobody is working on how to make doge part of your portfolio.”
Novogratz dismisses bitcoin and doge comparisons
The dogecoin boom has earned the asset comparisons to the recent bitcoin rally. However, Novogratz has cautioned against comparing the two assets. According to Novogratz:
“It’s very wrong to compare doge to bitcoin or the other coins. The amount of CAPEX and opex that goes into keeping the Bitcoin network decentralized and up and running each year is immense,” added Novogratz. “doge is a dog, no pun intended.”
Bitcoin has sustained its rally from the start of the year, hitting a new record price of almost $65,000. The April 14, 2021 record price was attained after crypto exchange Coinbase listed on Nasdaq.
The rise of dogecoin has witnessed several Wall Street leading figures and celebrities endorsing the asset. The cryptocurrency skyrocketed after electric vehicle manufacturer Tesla (NASDAQ: TSLA) CEO Elon Musk tweeted backing the digital currency.
By press time, Dogecoin was trading at $0.261, having dropped 17% in the last 24 hours based on data provided by CoinMarketCap. On a year-to-date basis, doge has surged by at least 6,000%.