In May 2021, Dogecoin had a market cap of $88 billion- an impressive feat for a coin that was created as a joke in 2013. Despite its recent success, Dogecoin has faced criticisms from Ripple CEO, Brad Garlinghouse.
Garlinghouse says that the inflation caused by the Dogecoin surge is creating “tailwinds” for Bitcoin and the crypto sector. However, the CEO has a clear warning for those who are tracking Dogecoin.
In a CNBC moderated panel discussion at the Fintech Abu Dhabi event. Garlinghouse stated, “I’m actually not convinced, somewhat controversially I guess, that dogecoin is good for the crypto market.”
Dogecoin is currently the 10th largest digital coin in the market with a value of almost $30 billion. Garlinghouse went on to say, “It was built as a joke, then it got some momentum from some high-profile people like Elon Musk. Dogecoin has some inflationary dynamics itself that would make me reluctant to hold it.”
Dogecoin has no limit
Currently, there is no hard limit on the total supply of Dogecoins, which makes the token different from many other cryptocurrencies. Garlinghouse has explained that rising inflation has accelerated interest in cryptocurrencies and made Bitcoin and inflation hedge-du-jour. The CEO stated, “We’re seeing inflation that we haven’t seen in decades.”
He then went on to explain, “When people are concerned about holding a fiat currency that might be inflating, and that’s devaluing, they’re looking at: ‘How can I hold other assets that won’t have that same inflationary dynamic?’”
Earlier this month, Bitcoin hit an all-time high of almost $69,000. However, the coin has fallen below $60,000 in the last few days. Nevertheless, its year-to-date return is higher than most other hedges against inflation, including gold, which is seen as a preserver of purchasing power during periods of sustained high inflation.
Bitcoin has momentum
According to Garlinghouse, “Bitcoin has a lot of momentum.” Bitcoin is currently the biggest digital coin with a market cap of around $1.1 trillion. The coin has seen a surge in institutional adoption recently as well as a rise in real-world use cases through the pandemic.
Garlinghouse added to his remarks, “I think if you step back and take a long view … these are real technologies that are fundamentally reworking how our financial infrastructure works and I’m very bullish and very optimistic about what the longer term horizon looks like.”
