Brad Garlinghouse – CEO of Ripple – recently stated that Dogecoin might not be good for the crypto market. In the context of using cryptocurrencies as an inflation hedge, he said that the meme coin’s inflationary nature doesn’t fit well into that picture.
Can Doge Really Fight Inflation?
The CEO aired his thoughts on the meme coin in a CNBC-moderated panel discussion at the Fintech Abu Dhabi event on Tuesday. While discussing the broader cryptocurrency market, he said that rising inflation is creating “tailwinds” for the entire sector.
Earlier this month, the labor department reported a 6.2% annual inflation for the month of October. Shortly afterward, Bitcoin’s price shot to an all-time high of $69K.
That said, Garlinghouse questioned how well Dogecoin could use this framework for its own value proposition.
“I’m actually not convinced, somewhat controversially I guess, that Dogecoin is good for the crypto market,” he said.
Brad Garlinghouse. Source: CNBC
Dogecoin was launched in 2013 and developed in hours, according to its creator. Though created entirely as a joke based on a popular internet meme, it now ranks as the 10th largest cryptocurrency by market cap. Shiba Inu – another dog-based meme token – has also entered the top ranks after capitalizing on Doge’s success. The popularity of both coins has been largely aided by Elon Musk’s tweets.
“Dogecoin has some inflationary dynamics itself that would make me reluctant to hold it,” Garlinghouse explained. Indeed, Dogecoin does not actually have a fixed supply the way Bitcoin does, giving it a weak argument for long-term use as an inflation hedge asset.
Is XRP Much Better?
That said, Ripple’s XRP hasn’t been much better on this front. Data from Messari shows that the cryptocurrency’s circulating supply increased by 20% over the last financial year after a massive sale from Ripple Labs. This created strong downward price pressure at the time.
Garlinghouse recognized that Bitcoin has “a lot of momentum” in this environment. With its supply capped at 21 million coins, many billionaires and organizations, including Bloomberg, are calling it an excellent inflation hedge. More recently, a US senator even proposed using Bitcoin to stabilize the US dollar’s inflationary spiral.
Featured Image Courtesy of Fortune