Dogecoin, the somewhat satirical cryptocurrency that’s based on a Shiba Inu dog, has memed its way to relevance this year—mostly due to support from Tesla billionaire Elon Musk.
The dogecoin price, up 10,000% over the last 12 months, has defied its critics and managed to hold onto most of its blistering gains, even as the wider bitcoin and crypto market goes into meltdown.
Now, as meme-master Elon Musk takes a break from boosting his pet project on Twitter, Sam Bankman-Fried, the billionaire chief executive of cryptocurrency exchange FTX, has said dogecoin is the “asset of the year for 2020 and 2021.”
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“Do you know how Time has their person of the year? If there is an asset of the year for 2020 and 2021, it would be dogecoin,” said Bankman-Fried, speaking on The Jax Jones and Martin Warner Show podcast.
“[Dogecoin] is the asset the accurately reflects our current economic climate,” said Bankman-Fried. “[Dogecoin] is the asset that we have all chosen, that we all deserve—for better or for worse. I don’t say that as an endorsement or anti-endorsement of it, I’m not trying to take a position on it.”
Dogecoin, created as a “joke” in 2013, has soared since January to become one of the world’s most valuable cryptocurrencies, sporting a market capitalization of around $37 billion. In comparison, bitcoin’s market capitalization is currently around $650 billion.
Dogecoin’s price has surged as traders and investors have piled into so-called meme stocks such as Gamestop and AMC, with soaring prices vastly outpacing traditional valuations of such assets.
“I think that when you look at what happened on Gamestop, the only surprising thing was that it wasn’t a cryptocurrency, because that pattern happens all the time in crypto, it’s not unusual,” said Bankman-Fried. The dogecoin price leaped higher in January after stock-trading platform Robinhood placed restrictions on Gamestop.
“The moment that Robinhood banned the buying of GameStop, hundreds of millions of dollars flowed instantly into dogecoin,” said Bankman-Fried. “It showed that if we all get together on social media and decide with our collective imagination what this thing is valued at.”
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Meanwhile, Elon Musk, the Tesla and SpaceX chief executive, has played an outsized role in helping dogecoin reach its current sky-high valuation. Musk has repeatedly talked up the meme-based cryptocurrency, calling developers to submit upgrade ideas and planning to put “a literal dogecoin on the literal moon” via one of SpaceX’s rockets.
Musk’s dogeoin support, something he himself has said isn’t something that should be taken seriously, has alienated much of the bitcoin community in recent months, with many resentful of Musk’s nonchalant attitude toward bitcoin.
“Elon is a powerful piece of this, he is actually the most influential man in the world when it comes to financial assets right now,” said Bankman-Fried.
“Everyone kind of knew he’d choose dogecoin. And we chose Elon. We signed up for this. We signed up for some amount of self-aware mockery, for some amount of a sense of humour, and for some amount of challenging norms and saying well what makes your thing better than dogecoin?”