Dogecoin’s massive rally this year can be seen as a kind of “middle finger” to the traditional financial system, longtime crypto bull Mike Novogratz told CNBC on Wednesday.
Novogratz spoke after the price of dogecoin surged again early Wednesday. The cryptocurrency — initially started as a joke in 2013 — had been approaching 70 cents per token, before giving up some of its gains later Wednesday to trade around 60 cents apiece. Dogecoin remains up nearly 13,000% year to date, with a market cap of roughly $78 billion.
“When you think about the whole spirit of what this crypto revolution is, there’s something pure in what dogecoin has done,” Novogratz, founder and CEO of Galaxy Digital, said on “Squawk Box.” “It’s a little bit of a middle finger to the system. People are unhappy with the current financial system. They just are.”
Novogratz repeated his concern about the sustainability of dogecoin’s rise, believing it lacks the same sophistication as bitcoin, which is the world’s largest cryptocurrency by market value. But the billionaire investor also said of dogecoin, “It would be very dangerous to be short, I’ll tell you that much.”
“I’m not participating on the long side,” he added. “I think it’s dangerous because once that enthusiasm dies, if it dies, you could have a long way down. But I don’t want to discredit. It’s shocking that it happened.”
Dogecoin began the year worth fractions of penny. Its speculative ascent began in earnest in late January, around the same time the Reddit-fueled trading frenzy in GameStop and other so-called meme stocks took off.
Dogecoin’s spike higher this week is happening in advance of Elon Musk‘s scheduled appearance to host NBC’s “Saturday Night Live.” The billionaire Tesla and SpaceX CEO has frequently mentioned dogecoin on Twitter in recent months, boosting the cryptocurrency’s popularity and price.
Billionaire entrepreneur Mark Cuban also has spoken favorably about dogecoin, recently making the case on Twitter that the meme-based cryptocurrency can mature into a “usable currency.” The NBA team Cuban owns, the Dallas Mavericks, accepts dogecoin as payment.
Novogratz’s Galaxy Digital — a crypto-focused financial services firm — put out a research report on dogecoin this week, which he noted called it “the most honest s***coin.”
“It is literally just a store of value for this group of young millennials and Gen Z,” Novogratz told CNBC. “I worry that once the enthusiasm rolls out, there’s no developers. There’s no institution coming in, but it’s got the moniker of ‘the people’s coin’ right now.”
Earlier Wednesday, New York-based Galaxy Digital announced an acquisition of San Francisco-based BitGo in a cash-and-stock deal valued at roughly $1.2 billion. Novogratz described it as “a marriage of West Coast and East Coast. It’s tech and finance.”
“With this acquisition we become the second-largest custodian behind Coinbase [with] $42 billion assets under custody,” Novogratz said. “We’re going to go from a company that invested in blockchain infrastructure, that used to blockchain, to one that builds blockchain infrastructure, and that’s as exciting as can be,” he added.
Disclosure: “Saturday Night Live” is a TV show of NBCUniversal, the parent company of CNBC. CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.