The meteoric rise of dogecoin this year is “definitely a mania,” crypto bull Meltem Demirors told CNBC on Monday, saying there’s a reason her digital asset investment firm has stayed away.
Dogecoin, which was started as a joke in 2013, became popular on social media around the time of the Reddit-fueled trading frenzy involving GameStop and a few other so-called meme stocks. Tesla CEO Elon Musk and other celebrities have posted favorably about dogecoin, too.
“It’s a classic sort of bubble, in my view,” said Demirors, chief strategy officer at CoinShares. “I’m not saying it’s good or bad. … Dogecoin is not for me. My firm does not produce analysis on dogecoin for a reason. We don’t have a dogecoin [exchange-traded product] in the market. We don’t trade dogecoin.”
Dogecoin has soared around 5,600% this year as it traded around 27 cents per token Monday morning, according to data from crypto news site CoinDesk. Its all-time high was reached earlier this month around 45 cents. At the start of 2021, dogecoin was worth fractions of a penny.
The ascent of dogecoin from relative obscurity to the seventh-largest cryptocurrency by market value — as of Monday, according to CoinMarketCap — has turned heads and served as fertile ground for some crypto skeptics to question the rise of digital assets in general.
However, even longtime believers in bitcoin and other cryptocurrencies such as Demirors and Galaxy Digital CEO Mike Novogratz have sat out of the dogecoin rally. Novogratz told CNBC last week the dogecoin situation “is even more bizarre” than what happened with GameStop.
“At the end of the day, we have these retail manias, and I think what’s happening with dogecoin is definitely a mania and we see this reflected in the price,” said Demirors, adding it shows for some people that “investing is entertainment.”
“I think dogecoin is sport,” he said on “Squawk on the Street,” adding that buying the digital asset is actually gambling, not investing. “A fun game is gambling, and I don’t believe that gambling should be encouraged.”
Earlier this month, the “Mad Money” host revealed that he paid off a mortgage using profits on some of his bitcoin holdings.