Dogecoin has had an impact that has undoubtedly been felt throughout the entire crypto space. However, whether this impact has been good or bad is still a hotly debated issue in space. The digital asset paved the way for cryptocurrencies that have no use cases to be at the forefront of the market and its breakout from the top 10 cryptocurrencies is evidence of its growth.
However, having tokens that serve no more than 'being' has shown how much power a strong community wields. For most, Dogecoin has been a way to earn some money while serving as a gateway to the realm of cryptocurrencies. For others like Brad Garlinghouse, CEO of Ripple, Dogecoin's rise to fame has done the market no favors.
Dogecoin is not good for the market
Garlinghouse, CEO of Ripple, was in CNBC to talk about the cryptocurrency market and how inflation was affecting it. The conversion switched to Dogecoin, where Garlinghouse shared his thoughts on the projects. Above all, he did not believe that meme currency is good for the cryptocurrency market.
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The CEO explains his stance on the lack of utility in the Dogecoin project. Even the creators of the project had said that they had created the altcoin as a joke and did not believe that it would go anywhere.
"Actually, I'm not convinced, I guess somewhat controversially, that dogecoin is good for the crypto market," Garlinghouse said. "It was built as a joke, then got some boost from some high-profile people like Elon Musk," he added.
DOGE price trending low | Source: DOGEUSD on TradingView.com
This school of thought had been earlier shared by Tony Richards, an official at the Reserve Bank of Australia, at a conference, although Richards had been defending the viability of crypto versus fiat.
How inflation is developing in cryptocurrencies
Garlinghouse pointed to rising inflation as the reason many projects like Dogecoin were receiving so much attention. The fear of rising inflation rates has undoubtedly led to an influx of new investors into the cryptocurrency market, driving prices up. The CEO explained that this had led people to find assets that proved to be an adequate hedge against inflation.
"When people are worried about having a fiat currency that could be inflating and that is devaluing, they are looking at: 'How can I hold other assets that will not have the same inflationary dynamics?'"
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However, Garlinghouse explained that it is these same inflationary concerns that have kept him away from Dogecoin. "Dogecoin has an inflationary dynamic in its own right that would make me reluctant to maintain it," said the CEO.
Garlinghouse's argument has some merit as the supply of Dogecoin is not limited. This means that there is an infinite supply of the asset, which lends credence to the CEO's concerns about its inflationary nature. However, Dogecoin remains a community favorite and has managed to hold its own in the market, currently ranking as the 10th largest cryptocurrency by market capitalization.
Featured image from CNET, chart from TradingView.com
