A friend of mine remarked the other day, wearing a pained expression, that he wished he had bought Dogecoin.
“What? Why?” I asked, struggling to mask my incredulity.
“Because the price has gone up so much. It’s up, like, 1,000% recently,” he said. “Elon Musk is endorsing it.” (Dogecoin’s price has surged 1,600% since the start of the year, as of the time of this newsletter’s writing.)
“Musk isn’t actually endorsing Dogecoin,” I replied in horror. So the mantle of buzzkill had been thrust upon me. “It’s a meme, like a literal joke. It’s funny.”
It was at that moment I realized some people are not in on the joke. Or, they don’t care that it’s a joke and they just want to join the party and make money? Reluctantly, I began my lecture about the inflationary economics of the Dogecoin money supply. Ten thousand new Dogecoins are programmed to be issued every minute for the rest of eternity, all but assuring the debasement of their value over time. Unlike Bitcoin, which is designed to be deflationary in the long term, Doge, intentionally, forever cheapens.
Wow, I realized, when did I get so boring?
Anyway, celebrities are apparently more fun than me. Billionaire Tesla CEO and recent Bitcoin convert Elon Musk has been singing the praises of Doge, if ironically, for years. Snoop Dogg, the rapper, recently rebranded himself, in jest, as “Snoop Doge.” Gene Simmons, the Kiss rock star, declared himself the “God Of Doge” and said he purchased a six-figure sum of the cryptocurrency. (As of press time, each Dogecoin traded for just under $0.08, up from half a penny at the start of the year; so yeah, that’s a lot of Doge.)
Doge enthusiasts generally come in one of three breeds. First are the Jokesters, like Musk. Second are the Gamblers, who are at best speculators, like Simmons, or at worst scam artists. Third are the Apologists who, like Shark Tank investor and Dallas Mavericks owner Mark Cuban, contend that Dogecoin offers an amusing entry point for people to educate themselves about digital currencies and investing. “It’s the best entertainment bang for your buck available,” he told Forbes.
Doge haters, on the other hand, tend to come in one type: the Spoilsports, or people who worry Doge investors are going to hurt themselves. Often that concern is self-interested, as in the case of ex-hedge fund manager Mike Novogratz, who recently shared his distaste for the antics of Doge pumpers on Twitter. As the CEO of the cryptocurrency-focused fund Galaxy Investment Partners, Novogratz is one of many Bitcoin bulls who stand to lose if public—or regulatory—sentiment sours on cryptocurrency; say, if the Doge bubble pops and people lose their shirts. As Bloomberg Opinion’s Lionel Laurent writes, “Even a blowup of the Dogecoin trade would leave their own favorite cryptocurrency potentially tainted by association.”
I have long been a member of the Musk camp myself. Doge is funny! But, I guess, after lecturing my friend and writing this newsletter, I could be said to have migrated to Team Cuban. My two rules for Dogecoin are: 1. Don’t buy Dogecoin to make money. (Sorry, Simmons.) And 2. Buy Dogecoin strictly for recreation, because it’s silly and stupid and fun, like an amusement park ride.
If nothing else, Dogecoin will at least teach people this about cryptocurrency and investing: It’s a doge eat doge world out there.
Robert Hackett
Twitter: @rhhackett
