Dogecoin (CRYPTO: DOGE) was in the doghouse on Friday morning. By 10:40 a.m. EDT, Elon Musk’s favorite cryptocurrency was down 6.2% from Thursday, and people looking for a reason should turn their attention to Fred Ehrsam.
In an interview on Wednesday on Bloomberg TV, Ehrsam, the co-founder of the cryptocurrency trading platform Coin base (NASDAQ: COIN), delivered this prediction: “90% of the NFTs produced … will have little or no value in three to five years.”
Now it’s important to point out: Although both rely on blockchain technology, NFTs – non-fungible tokens used to certify ownership of digital assets – are completely different from cryptocurrencies. But both NFTs and crypto are relatively new technologies, and the differences can get a little fuzzy in the minds of many traders.
If Coinbase’s co-founder says nine out of ten NFTs will be completely worthless in just a few years, it could have shaken investor confidence in Dogecoin, too. The fact that Ehrsam warned in the same interview that most of the “millions of cryptocurrencies and crypto assets” that he expects to be created in the coming years will not work – and that governments will step up their efforts to regulate the those who do – are probably doing no good to Dogecoin investors either.
It’s worth noting, however, that in the same interview that Ehrsam slammed NFTs in, the Coinbase co-founder also said the following:
“If crypto has taught us anything, it is never to dismiss a good meme that might not later manifest itself in more concrete progress.” By the way, he was responding to a question about Dogecoin when he made that comment, and the implication therefore seems to be that investors shouldn’t assume that Dogecoin will be one of the cryptocurrencies that are going to fail.
Oddly enough, this seems to be exactly what traders are doing on Friday.
Dogecoin price data from YCharts
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.