Mike Novogratz, the billionaire of the Crypto Merchant Bank Galaxy Digital, was critical of two of the currently most popular cryptocurrencies: XRP and Dogecoin (DOGE).
Novogratz told Bloomberg TV on Friday that he won’t jump on the Dogecoin bandwagon despite recent price movements in the DOGE markets. Why? “[Dogecoin] is a memecoin … it doesn’t really serve a purpose, ”he said.
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“It’s reminiscent of GameStop,” said Novogratz, referring to the WallStreetBets (WSB) saga that revitalized the capital markets earlier this year. At the time, WSB investors were pumping millions into GameStop (NYSE: GME) and several other meme stocks to “squeeze” hedge funds on Wall Street. “I would be very, very concerned if a friend of mine invested in Dogecoin at these prices,” he said.
The price of Dogecoin rose significantly over the course of 2021. Part of its surge is directly related to WSB traders: in February, a spin-off group of WSB investors targeted DOGE as their next asset to “pump”. The surge continued when Tesla founder Elon Musk began promoting the currency on Twitter.
As a result, DOGE’s price has increased more than 7300% year-to-date ($ 0.004834 on Jan 1st to ~ $ 0.36 at press time).
“There’s a retail frenzy – it’s not really seen in Bitcoin and Ethereum.”
Additionally, Novogratz commented on XRP, which has increased its price significantly since the start of the year: $ 0.23 on Jan. 1 to $ 1.46 at press time, an increase of around 540%.
“There is some pocket foam and speculation in retail [in altcoin markets]”He said.” XRP, whose parent company is under investigation by the SEC, went from $ 0.40 to $ 1.60 in one month. That doesn’t make any sense to me either, “he said.
“There’s a retail frenzy – it’s not really seen in Bitcoin and Ethereum. On the contrary, money comes from Bitcoin and Ethereum and goes into those other coins for more juice and more excitement.”
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However, several Twitter users clapped back in the comments under Bloomberg’s post on the interview on Novogratz.
@Nietzbux, an anonymous cryptocurrency enthusiast, wrote: “@novogratz, the man who saved the Ethereum Foundation and bought ETH to fund it and treated it exactly like a security offering, says that XRP is being investigated and therefore is just as overrated as Doge? You, sir, are not an objective party. “
Santiago Velez, co-founder and head of research and development at Block Digital, took the conversation differently. “* Sigh *. Downsize people, there are products that need to be sold, at the right ratings and in due time. First sell the inventory that is (technologically) expired, then sell the next big thing. 10 years of play , Patience (sic), ”he wrote.
*Sigh*. People downsize, there are products that need to be sold, at the right reviews and at the right time. Sell the inventory that is (technologically) expiring first, then sell the next big thing. 10 years of play, patience.
– Santiago Velez (@ Santiag78758327) April 17, 2021
“Is Dogecoin The Pets Of Cryptocurrency Era?”
In any case, each of these statements seems to point to a single fundamental truth: altcoin markets are growing at an unprecedented rate. The reasons for this and the sustainability of the current cycle are not yet known.
In an interview with Bloomberg Wealth, Scott Knapp, Chief Market Strategist at CUNA Mutual Group, compared the current altcoin frenzy with the “dot-com days”.
“We knew something big was going on, a lot of investors were following it hard. It created a bubble, ”he said. “For every Amazon.com, there were 10 Pets.com that went bankrupt. Is Dogecoin the Pets.com of the Cryptocurrency Era? “
Michale O’Rourke, chief market strategist at JonesTrading, said some of the altcoin madness could be due to the stimulus money the U.S. government pumped into the economy in 2020 and 2021, the economy is now becoming even worthless Assets, ”he said.