A top fintech executive is not a big fan of the phenomenal meme cryptocurrency, Dogecoin.
Ripple CEO Brad Garlinghouse said in a CNBC report that he is "not convinced" that a meme cryptocurrency like Dogecoin is "good for the market." Ripple is the company behind the XRP token.
Dogecoing Price Prediction: DOGE 'Not Good' for Crypto Space
Garlinghouse noted that Dogecoin "has some inflationary dynamics" that should make investors reluctant to hold it. Having no hard limit on the total supply of the coin, DOGE is also not good for the broader crypto space, he added.
Dogecoin has above 132 billion coins outstanding, with about five billion in new coins circulated each year. Its market cap has jumped about 71 percent year-to-date to more than $28 billion.
Dogecoin, which started as joke cryptocurrency based on the Shiba Inu meme, started with a supply limit of 100 billion coins, which it reached in 2015. Since then, it was changed to offer uncapped supply, while limiting a reward of 10,000 DOGE per block to have inflation under control.
DOGE is considered one of the most successful cryptocurrencies this year, reaching the top 10 largest tokens by market cap earlier this year. Currently, Dogecoin is the 10th most valued token at $0.22, which is up 6.000 percent year-on-year.
DOGE is trading at $0.219970, soaring1.49 percent on Thursday in the last 24 hours, CoinDesk real-time figures show. Its success is attributed to endorsements from Tesla and SpaceX CEO Elon Musk, who has since been labeled as the "Dogefather" as he promotes the coin actively on Twitter.
Garlinghouse stressed that Dogecoin was "built as a joke," taking some momentum from "high-profile people like Elon Musk."
Rising Inflation Benefits Crypto Market in General - Ripple CEO
Despite his skepticism about Dogecoin, Garlinghouse is generally optimistic about the crypto space, especially Bitcoin.
Bitcoin is actually benefiting from rising inflation. This is because with an inflating and devaluing fiat currency, investors would consider holding other assets that don't carry that same inflationary dynamic, the CNBC report further said.
Bitcoin is considered as a strong hedge against inflation because of its fixed supply of around 21 million coins, not all of which have been mined yet.
The entire crypto market has topped $3 trillion in November, with the consumer price index and personal consumption expenditures index reaching their highest point since October 1990 at 6.2 percent and five percent, respectively, a Markets Insider report said.
Bitcoin reached a record high of about $69,000 per token earlier this month. Even with its drop in value to $60,000 recently, Bitcoin's year-to-date return outperformed traditional hedges of inflation, which includes gold that preserves purchasing power in the event of continued high inflation.
According to Garlinghouse, Bitcoin is proceeding with "a lot of momentum," given its leading market cap of $1.1 trillion, wider institutional adoption, and more mainstream use cases. He added that these crypto tokens are "real technologies" that are currently redefining how the financial system works.
Garlinghouse said he is "very bullish and optimistic" about what the future holds for Bitcoin and the entire crypto space.
