Jim Cramer, the host of Mad Money, has warned that dogecoin (DOGE) is a security, which will be regulated and has even questioned the supply of dogecoin.
Cramer, a former hedge fund manager who co-founded Thestreet.com, a website devoted to financial literacy, warned against investing in dogecoin (DOGE) Thursday.
Jim Cramer hosts Mad Money, an American finance television programme that premiered on CNBC on March 14, 2005. The show deals with investing and speculating, particularly in public companies.
Jim Cramer tweeted, “Be careful with Dogecoin. It is a security, so it will be regulated. We’ll find out how many there are and how many are created daily to make money for exchanges.”
In response to Cramer’s comment about the popular meme coin, which also aired on CNBC Thursday, the reaction on Twitter has been intense.
There were a number of people who disagreed with Cramer. Many expressed the opinion that dogecoin is not a security, questioning how Cramer reached this conclusion. Some people criticized Cramer for not knowing about blockchains or DOGE’s supply.
The co-creator of Dogecoin, Billy Markus, responded to Cramer: “Learn how blockchain works. It is in public code on the public blockchain, easily accessible for anyone to view. There are already many and more are created every day.”
It works like bitcoin. It even has 99.5% of the same code as bitcoin. It doesn’t pass the Howey Test because it’s a proof-of-work cryptocurrency. “Educate yourself,” Markus said, adding that Cramer’s warning is “the biggest bull signal ever for dogecoin”.
Gary Gensler, the Chairman of the Securities and Exchange Commission, is currently focusing on regulating cryptocurrency exchanges. He believes many cryptocurrencies listed on exchanges are securities and should be registered.
SEC Chairwoman Mary Schapiro, however, has refrained from discussing specific cryptos, including ether. The SEC is also involved in an ongoing lawsuit against Ripple Labs for XRP.
The crypto community knows Musk as the Dogefather. Musk owns dogecoins himself, too. Tesla has recently begun accepting DOGE for merchandise.
According to its market cap, dogecoin is the 11th largest cryptocurrency. Its supporters include Elon Musk, CEO of Tesla, and Mark Cuban, star of Shark Tank. Musk considers dogecoin as a good option for transactions.