Bitcoin bull Mike Novogratz compared Dogecoin to GameStop - and warned buyers could 'lose lots of money'
- Dogecoin buyers should be ready to stomach heavy losses, Mike Novogratz said.
- Real money is at risk in the joke cryptocurrency, the Galaxy Digital CEO said.
- Novogratz also criticized Tesla CEO Elon Musk for touting Dogecoin and driving up its price.
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The Dogecoin craze started as a joke, but so many people have invested in the cryptocurrency that serious cash is now on the line, Mike Novogratz told CNBC's "Squawk Box" this week.
"Dogecoin reminds me a lot of GameStop," the Galaxy Digital CEO and founder said. "It was funny for a little bit, but now it's at a market valuation where people are going to lose lots of money in Doge."
The digital coin's market capitalization hit $10 billion earlier this week, surpassing the market caps of Shake Shack, Under Armour, and Dropbox.
"Bitcoin has a real purpose, Ethereum has a real purpose," Novogratz continued. "Doge is kind of a meme, a joke."
The crypto chief also bemoaned Tesla CEO Elon Musk's trumpeting of the meme-inspired coin, which has helped to boost its price by as much as 1,000% in the past two weeks. Musk hailed Dogecoin as "the people's crypto" and said he bought some for his youngest son so he could be a "toddler hodler."
"I wish he wouldn't," Novogratz said. "Doge is a little bit like the 420 comment," he added, referring to one of Musk's most notorious tweets.
The Tesla boss tweeted in 2018 that he had "funding secured" to take Tesla private at $420 a share. Regulators charged Musk with securities fraud, and the executive agreed to pay a $20 million fine and step down as Tesla's chairman to settle the matter.
Novogratz recently criticized high-profile investors for "encouraging the masses" to buy GameStop shares when they had already skyrocketed to $400. "It was almost a certainty they'd lose all their money at that point," he said.
The crypto boss has also drawn a line between Dogecoin and other cryptocurrencies in recent days. While he thinks Bitcoin could double in price by the end of this year as major institutions follow Tesla in buying it, he sees "no long-term value in Dogecoin."
Here's a chart showing Dogecoin's astronomical rise this year:
