Ripple CEO Brad Garlinghouse recently said that Dogecoin may not be a good choice for the crypto market. He said that meme coins’ inflationary nature is not a good fit for cryptocurrencies being used as an inflation hedge.
Is it possible for dogs to fight inflation?
In a panel discussion moderated by CNBC at Tuesday’s Fintech Abu Dhabi event, the CEO shared his views on the meme coin. He said that the cryptocurrency market is experiencing “tailwinds” due to rising inflation.
The labor department reported earlier this month a 6.2% annual inflation for October. The price of Bitcoin soared to $69K shortly afterward.
Garlinghouse, however, questioned whether Dogecoin could make use of this framework to its own value proposition.
He stated that he was not convinced (and somewhat controversially) that Dogecoin was good for crypto markets.
Brad Garlinghouse. Source: CNBC
According to its creator, Dogecoin was created in just hours and launched in 2013. Although it was created solely as a joke, it is now the 10th most popular cryptocurrency in terms of market capital. Shiba Inu, another meme token that is dog-based, has also risen to the top after Doge’s success. Elon Musk’s tweets have greatly contributed to the popularity of both coins.
Garlinghouse stated that Dogecoin’s inflationary dynamics make it a difficult asset to own. Dogecoin doesn’t have a fixed supply like Bitcoin, making it an inefficient asset for inflation hedge assets.
Is XRP Better?
Ripple’s XRP isn’t faring much better. Messari data shows that the cryptocurrency’s circulating supply has increased by 20% in the past financial year following a huge sale by Ripple Labs. This led to strong price pressure.
Garlinghouse acknowledged that Bitcoin is gaining momentum in this environment. Many billionaires and organizations including Bloomberg call it an excellent inflation hedge, with its supply cap at 21 million coins. A US senator proposed that Bitcoin could be used to stabilize the inflationary spiral of the US dollar.
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