Elon Musk Says Dogecoin Could Be Cryptocurrency's Future, But Warns Followers to 'Invest With Caution'
The billionaire tycoon may have sparked intense interest in the digital currency, but he also has his own reservations about it.
Billionaire tycoon Elon Musk may be a strong advocate for Dogecoin, but he still wants you to invest in the cryptocurrency carefully.
On Thursday, the SpaceX and Tesla CEO took to Twitter to share a video in which a TMZ reporter asks him whether he really thinks Dogecoin "could really be the next currency for the world." In response, Musk flips the question back on the reporter, asking him what he wants. When the reporter says he has high hopes for Dogecoin, Musk then says, "I think it should be the will of the people, you know?"
Cryptocurrency is promising, but please invest with caution! https://t.co/A4kplcP8Vq— Elon Musk (@elonmusk) May 7, 2021
The TMZ reporter presses on with more questions about Dogecoin, asking whether there is a problem with the digital token since there is no limit on its number. Musk responds by saying that there is an issue, and he cautions eager investors to not put "their life savings in cryptocurrency."
"I think that's unwise," he says. "But if you want to ... speculate ... there's a good chance that crypto is the future currency of the Earth."
The question will then become which cryptocurrency will take over, Musk says, while emphasizing that nobody should "go too far on the crypto speculation front." Later in the interview, he acknowledges there could be an "ironic outcome" in which Dogecoin — a cryptocurrency that was initially invented as a joke — could become the currency of the future.
Perhaps the most interesting part of the interview, however, is toward the end, when a reporter points out that Dogecoin spiked days after Musk tweeted about it. The reporter asks whether the billionaire will tweet about the cryptocurrency again, but Musk shoots the idea down.
"Listen, don't take too much risk on crypto," he says before driving off.
Last year, Musk sparked a wave of interest in Dogecoin after he sent a series of tweets about it as joke. The cryptocurrency has since seen a dramatic spike — it shot up nearly 40% this past week in the lead-up to Musk's appearance on Saturday Night Live.
Still, other investors, like Musk, have issued warnings about Dogecoin, arguing that intense interest could lead to a bubble in the cryptocurrency market.
"Dogecoin’s rise is a classic example of greater fool theory at play," David Kimberley, an analyst at U.K. investing app Freetrade, told CNBC recently. "When everyone is [buying Dogecoin], the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen."
Justin Chan is a news writer at Entrepreneur.com. Previously, he was a trending news editor at Verizon Media, where he covered entrepreneurship, lifestyle, pop culture, and tech. He was also an assistant web editor at Architectural Record, where he wrote on architecture, travel, and design. Chan has additionally written for Forbes, Reader's Digest, Time Out New York, HuffPost, Complex, and Mic. He is a 2013 graduate of Columbia Journalism School, where he studied magazine journalism. Follow him on Twitter at @jchan1109.