Crypto billionaire Sam Bankman-Fried discusses why dogecoin should be named asset of the year - and how its rise reflects the meme-stock trend
- The retail momentum behind dogecoin makes it the asset of the year, Sam Bankman-Fried said.
- Endorsement by Elon Musk and the like are crucial to its growth, the crypto billionaire said.
- He likened GameStop's sudden spike to the dogecoin trading pattern, powered by day-traders.
Sam Bankman-Fried, the 29-year-old billionaire founder of crypto exchange FTX, said in a recent podcast that dogecoin should be named asset of the year, given the massive fanbase the meme token has managed to rack up.
"If there is an asset of the year for 2020 and 2021, it would be dogecoin," he said in an episode of The Jax Jones and Martin Warner Show podcast. "That is the asset that accurately reflects our current economic climate. That is the asset that we have all chosen, that we all deserve - for better or for worse."
Dogecoin was last trading 12% lower at 22 cents on Monday, amid a broad cryptocurrency sell-off triggered by China's intensification of its crackdown on crypto mining and services. The digital token is still up around 4,700% so far this year.
Bankman-Fried said he wasn't attempting to either endorse or reject dogecoin, or even take a position on it. "I'm just saying everything we as a society have decided over the last year has been dragging us closer and closer to the dogecoin financial standard."
The meme token has seen its popularity explode this year after influencers including Elon Musk and Mark Cuban drove attention and support its way via tweets. Dogecoin investors bet on being able to cash out by selling to the next person looking to invest, so they can make a quick buck, and those comments drew a lot of new entrants to the market.
Cardano creator and ethereum cofounder Charles Hoskinson is among those who have warned that this situation is a bubble waiting to burst and that investors will be left holding the bag if they don't exit in time.
Digging into why and when retail investors turned their attention to dogecoin, Bankman-Fried said celebrity endorsements are fundamental to the token's future growth.
"Elon is a powerful piece of this - he is actually the most influential man in the world when it comes to financial assets right now," he said. "Everyone kind of knew he'd choose Dogecoin. And we chose Elon. We signed up for this. We signed up for some amount of self-aware mockery, for some amount of a sense of humour, and for some amount of challenging norms."
He agreed that dogecoin's value is not based in its underlying technology, and suggested people don't invest in it for the product or its roadmap. "They buy it because it is just a funny looking dog and the fact that it is pronounced 'doge'. That's why they bought it," he said.
Bankman-Fried also discussed GameStop stock's sudden price spike, and decribed how day-traders are deciding what the value of such assets should be.
"The only surprising thing was that it wasn't a cryptocurrency, because that pattern happens all the time in crypto -it's not unusual," he said.
He went on to talk about how Reddit traders banded together to ignite the video-game retailer's trading momentum, and how that connected with dogecoin trading.
"The moment that Robinhood banned buying of GameStop, hundreds of millions of dollars flowed instantly into dogecoin. Directly out of GameStop into dogecoin. Because those are the same types of assets. People see them very similarly," Bankman-Fried said, adding that millions of day-traders en masse can decide the valuation of an asset after discussing it on social media.