Is There a Cryptocurrency Bubble? Just Ask Doge.
But if he did, he might channel Doge to offer a few cautionary words for investors who
are falling for cryptocurrency start-ups, Silicon Valley’s latest moneymaking craze:
Mr. Palmer, the creator of Dogecoin, was an early fan of cryptocurrency, a form of encrypted digital money that is traded from person to person.
The Securities and Exchange Commission warned investors this year about the growing number of coin offerings, saying
that “fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams.”
Mr. Palmer predicts that while some I. C.O.s may finance the creation of new and exciting enterprises, many will go up in smoke.
C.O., a type of fund-raising campaign in which investors buy into a new venture using Bitcoin or another cryptocurrency
and receive virtual “tokens” instead of stock or voting rights in the company.
“It’s become a securities market.”
Other high-profile skeptics have sounded the alarm about a potential crash in the crypto market, including Jamie Dimon, the chief executive of JPMorgan Chase, who last week called Bitcoin a “fraud,”
and compared the current digital money craze to the 17th-century Dutch tulip bubble.
When Mr. Palmer’s interest in digital money began, just four years ago, cryptocurrency was the sole province of math geeks and early adopters.