Dogecoin’s meteoric rise this year is “definitely a mania,” crypto bull Meltem Demirors told CNBC on Monday, saying there was a reason her digital asset investment firm stayed away.
Dogecoin, which started as a hoax in 2013, became popular on social media at the time of the Reddit-fueled trading frenzy with GameStop and a few other so-called meme stocks. Tesla CEO Elon Musk and other celebrities have also written positively about Dogecoin.
“I think it’s a classic kind of bubble,” said Demirors, chief strategy officer at CoinShares. “I’m not saying it’s good or bad. … Dogecoin is not for me. My company doesn’t do an analysis of Dogecoin for a reason. We don’t have Dogecoin [exchange-traded product] on the market. We do not trade in Dogecoin. “
Dogecoin is up around 5,600% this year as it traded around 27 cents per token on Monday morning, according to data from crypto news site CoinDesk. The all-time high was reached at the beginning of the month at around 45 cents. At the beginning of 2021, Dogecoin was worth fractions of a penny.
Dogecoin’s rise from relative obscurity to the seventh largest cryptocurrency by market value – starting Monday, according to CoinMarketCap – has turned heads and served as fertile ground for some cryptoskeptics to question the rise of digital assets in general.
But even long-time supporters of Bitcoin and other cryptocurrencies such as Demirors and Mike Novogratz, CEO of Galaxy Digital, have withdrawn from the Dogecoin rally. Novogratz told CNBC last week that the Dogecoin situation was “even more bizarre” than it was at GameStop.
“Ultimately, we have these retail manias, and I think what happens to Dogecoin is definitely a mania, and we’re seeing that reflected in the price,” Demirors said, adding, for some people, “Investing is entertainment.” “
CNBC’s Jim Cramer, who also believes in Bitcoin, said Monday he was not buying the Dogecoin story at all.
“I think Dogecoin is sports,” he said on Squawk on the Street, adding that buying the digital asset is actually gambling, not an investment. “Gambling is a fun game and I don’t think that gambling should be encouraged.”
Earlier this month, the Mad Money host announced that it had paid off a mortgage with profits from some of its Bitcoin holdings.