The host of CNBC’s Mad Money show, Jim Cramer, has issued a public caution against Dogecoin investments. Cramer asserts the day of reckoning is coming for DOGE, which he believes is an unregistered security.
Jim Cramer Sounds The Alarm Over Dogecoin
In a January 20 tweet, Cramer warned that Dogecoin is a security. The TV host suggested that the original meme coin will be regulated and the community will be able to confirm exactly how many tokens are in circulation. While Bitcoin bulls have lauded the crypto’s finite supply of 21 million, they have long criticized inflationary Dogecoin owing to its unlimited supply.
Cramer further claimed the doggy-themed cryptocurrency is used to make money for centralized crypto exchanges. He called for caution among his followers when it comes to trading or investing in Dogecoin.
Responding to the CNBC host, Dogecoin co-creator Billy Markus advised Cramer to educate himself more about how blockchain works. Markus pointed out that the number of Dogecoins out there as well as the coins created every day is viewable by anyone on the public blockchain.
Moreover, he said Dogecoin doesn’t qualify under the famous Howey test since it uses a proof-of-work consensus mechanism similar to bitcoin. The SEC has been applying this annoyingly complicated test to determine whether certain assets qualify as investment contracts and are indeed securities.
This is noticeably not the first time Cramer is dismissing Dogecoin. While DOGE enjoyed a meteoric rally early last year, Cramer rejected the idea of investing his money into the joke cryptocurrency. “Sorry, I’m not gonna do that one. I’m a seller of Dogecoin,” he stated at the time.
Dogecoin stole the spotlight last year thanks to Elon Musk. The Tesla CEO — who once called himself the Dogefather — has long endorsed Dogecoin, with his multiple tweets pumping up the price of the meme-based cryptocurrency on several occasions.
Musk reaffirmed his loyalty to Dogecoin last month during a Twitter exchange regarding Web 3 with former Twitter CEO Jack Dorsey, revealing he was “pro Doge”.
After dropping bitcoin in May last year, Tesla now accepts Dogecoin for merchandise payments.