Dogecoin is not good for the crypto market, Ripple CEO says.
- In May of this year, Dogecoin, a cryptocurrency based on a viral internet meme of a Shiba Inu dog that began as a joke in 2013, reached a market capitalization of $88 billion.
- Dogecoins have no hard restriction on their total quantity, which sets them apart from some other popular cryptocurrencies.
- In November, Bitcoin reached an all-time high of roughly $69,000 per token.
Red hot inflation is creating "tailwinds" for bitcoin and the crypto sector, according to Ripple CEO Brad Garlinghouse, but he has a warning for those following the meme token dogecoin.
"I'm honestly not convinced, somewhat controversially, that dogecoin is good for the crypto market," Garlinghouse said during a panel discussion organised by CNBC at the Fintech Abu Dhabi event, which aired Tuesday.
In May of this year, Dogecoin, a cryptocurrency based on a famous online meme of a Shiba Inu dog that began as a joke in 2013, reached a market capitalization of $88 billion.
It is now the tenth largest digital asset, with a market value of about $30 billion, according to industry website CoinMarketCap.
"It started off as a joke, but it gained traction thanks to certain high-profile people like Elon Musk," Garlinghouse explained.
"Dogecoin itself has some inflationary aspects that make me hesitant to hold it," he continued.
Dogecoins have no hard restriction on their total quantity, which sets them apart from some other popular cryptocurrencies.
Rising inflation, according to Garlinghouse, CEO of fintech startup Ripple, which is closely tied with the XRP digital asset, has spurred interest in cryptocurrencies, making bitcoin an inflation hedge-du-jour.
"Inflation is at levels that haven't been seen in decades," Garlinghouse added.
When consumers are worried about owning a fiat currency that may inflate and devalue, they consider: 'How can I store other assets that won't have that same inflationary dynamic?'
In November, Bitcoin reached an all-time high of roughly $69,000 per token. Despite dipping below $60,000 in recent days, the stock's year-to-date return has outperformed even the most traditional inflation hedges, such as gold, which is considered as a preserver of buying power during prolonged periods of high inflation.
"Bitcoin is gaining traction," Garlinghouse remarked. As of November, the largest digital coin had a market cap of about $1.1 trillion, and has experienced growing institutional acceptance and more widespread real-world use cases as a result of the pandemic.
"I think if you take a long view... these are actual innovations that are fundamentally redesigning how our financial infrastructure works, and I'm quite positive and excited about what the longer term horizon looks like," Garlinghouse continued.
Middle East focus
Ripple, which just launched a new office in the Dubai International Financial Center and expects to hire 250 people, also announced a partnership with Pyypl, a Dubai-based start-up, to facilitate cross-border payments and tap into the UAE-Saudi remittance corridor. Two of the world's three greatest remittance corridors are located in the Middle East.
Despite an ongoing SEC investigation into the status of Ripple's XRP digital token, Garlinghouse stated, "it's been a gangbuster year for Ripple."
Given what he called a lack of "clarity" from US regulators, Garlinghouse said the Middle East was one of Ripple's fastest growing areas.
"It's terrible that the world's largest economy, which really helped spark the internet as we know it today... is actually lagging behind," Garlinghouse added, complimenting countries like the United Arab Emirates, Japan, Singapore, and Switzerland for taking the lead on crypto legislation.
"We're trying to hire roughly 250 people, with more than half of them coming from outside the US," he stated.