Jim Cramer, the host of the Mad Money show on the American channel CNBC, warned investors against buying Dogecoin, calling the meme cryptocurrency a security.
TV presenter wrote on Twitter that users should exercise caution if they want to trade DOGE.
Jim Cramer criticized Dogecoin for being prone to inflation due to the lack of limits on the number of coins. Whereas, for comparison, the supply of bitcoin is finite and amounts to 21 million coins. The TV presenter is sure that regulators will soon pay attention to DOGE:
“Dogecoin is a security that will not escape government regulation. We will find out how many of these coins are in circulation, and how many DOGEs are printed daily in order for cryptocurrency exchanges to make money from it.”
In the comments on Cramer’s tweet, Dogecoin co-founder Billy Markus advised Kramer to learn how blockchain works. The commentator assures that information about the number of DOGEs in circulation and created every day is available to any user of the open blockchain. Markus noted that according to the Howey test, DOGE cryptocurrency cannot be classified as a security, as it uses the Proof-of-Work consensus mechanism. The same algorithm uses bitcoin.
Previously, Kramer was distrustful of bitcoin, preferring to invest in gold and stocks, but subsequently changed his mind about the first cryptocurrency. In 2020, Kramer called bitcoin an effective tool for diversifying an investment portfolio and hedge against inflation.