Dogecoin is a barefoot cryptocurrency. Investor caution about Elon Musk’s preferred cryptocurrency.
The most famous The Australian financial guru is adamantly opposed to investing in the cryptocurrency that has skyrocketed in value as a result of Elon Musk’s profile.
Scott Pape, a.k.a. the Barefoot Investor, has given a cautionary note to his followers considering investing in the hot Dogecoin cryptocurrency.
Dogecoin, a digital currency launched in 2013 by Australia’s Jackson Palmer and named after a viral meme known as Doge, has seen its value soar to record levels in recent days.
It’s a phenomenon that some critics attribute to billionaire Tesla founder Elon Musk’s continued public promotion.
Musk, who has over 53 million Twitter followers, is hosting the popular American television show Saturday Night Live this weekend, and this presence, coupled with Musk’s daily tweets about Dogecoin, has resulted in the cryptocurrency’s price soaring.
As of Wednesday night, investors who kept $US1000 ($A1280) of the currency on January 1 will have $US112,500 ($A144,500) in their wallets.
It’s a phenomenal growth rate, but the best-selling financial advice author Pape could not have been more emphatic in his rejection of Dogecoin as an investment play in an email to his subscribers late last month.
Although Pape acknowledged Dogecoin had outperformed Bitcoin and Ethereum over the last six years, he noted it was “set up as a piss-take by its Australian founder” and had “zero tangible value.”
“It is of no value,” he wrote. “So, do I feel a twinge of guilt for missing the opportunity to enter? Not at all.
“For the same reason that I’ve never considered investing 1% of my net worth in the pokies (just in case I hit the jackpot).
The point is this: Life is extremely difficult when you think you can make a fast buck selling magical dog memes.
Being a gambler is frustrating. The game requires no talent, and the odds are stacked against you. As you can see, the only way to earn real money is to sell. And every man and his dog intends to sell all of their Dogecoin at the top. Each and every one of them.
“It’s called the ‘greater fool principle’ (i.e., you only win if a greater fool buys in at a higher price), and history is replete with examples of people who abruptly realized they were the fool.”
“If you are convinced to sell your boring index funds and sleep with puppies, I can almost guarantee you will develop financial fleas,” Pape added.
Musk also alerted investors to be cautious of cryptocurrencies ahead of his Saturday Night Live debut, after months of promoting Dogecoin’s success.
“Cryptocurrency is exciting, but investors should exercise caution!” Tesla CEO Elon Musk tweeted early Friday morning.
Musk’s unusual investment alert comes as the price of Dogecoin — a cryptocurrency symbolized by a Shiba Inu meme — has risen to approximately 60 cents per token, according to CoinDesk results.
It has increased by a whopping 10,400% since January 1, according to CoinDesk numbers.
“Dogecoin is surging because many cryptocurrency traders do not want to miss any of the excitement around Elon Musk’s hosting of Saturday Night Live,” Edward Moya, senior market analyst at Oanda, wrote on Tuesday.