The Tragic Downfall Of The Dogecoin Millionaire

What's up, Gramids? Guys, here. So, almost a year ago, I met up with a man who maxed out his credit cards, invested his life savings, and threw it all in a moonshot opportunity that he believed would make him obscenely rich: Dogecoin. Just 69 days after his initial investment, he was able to turn his $180,000 into a million dollars, giving him mainstream attention as the "racks to riches Dogecoin millionaire." A few days after that, Andre Jake met up with the Dogecoin millionaire in person, where they went through a heated debate about whether or not he should sell everything at $0.25 or "diamond hands" until the price of Dogecoin reaches a dollar.

Long story short, he didn't sell. Initially, this worked to his favor because the longer he held on, the more his account grew, the more praise he got, and not too much longer after that, his account grew to a peak of nearly three million dollars, at which point he quit his job in favor of this new opportunity. Now, again, you would think that turning $180,000 into $3 million in three months would prompt you to sell everything, buy a house in cash, and live off the returns for the rest of your life. But nope, he wanted to wait for it to hit a dollar.

And that's when I got a knock at the front door. Sure enough, it was them. After begging him to sell and lock in the profits, he kept holding and holding and holding to the point where now his Dogecoin portfolio has lost about 90% from the peak and is currently worth just over $300,000. So today, one year later, I've reconnected with the Dogecoin millionaire to see his account, hear his thoughts, and get an update on one of the craziest stories I have ever covered here on the channel.

First, we got to talk about the timeline of Dogecoin. Yes, it is true that it started off as a joke between its creators in 2013. It was never meant to be taken seriously, and it was never designed to be used as a currency. But the lovable nature of the Doge meme made it irresistible for people wanting to buy and hold onto it. Over time, it began growing in popularity and price. Just two years ago, it was trading at one-fifth of one cent. Meaning had you just invested $1,000, today you would be at 4,000% and your $1,000 investment would be worth $40,000.

So, what happened to cause this insane rally and his Doge's pointed good value at today's prices? Well, we should look to what started all of this in the first place, and that's what brings us to a few main catalysts. First, trading on Robinhood 2018, price: $0.002 cents each. In 2018, when Robinhood announced their cryptocurrency platform, Dogecoin was added onto the list as an additional option that people could buy and sell. That gave it significantly more exposure and allowed their users to buy in as they would any other stock, which, of course, boosted up the price.

Second, TikTok 2020, price: $0.0043 cents each. Shortly after the pandemic, a viral video began appearing on TikTok known as the "Dogecoin Challenge." It made the argument that the value of Dogecoin is practically worthless and if all 800 million users of TikTok each invested $25, they could drive up the price to a dollar and turn that into a nearly $10,000 profit. Well sure enough, thanks to the virality of that video, the price went up 43% in 48 hours. Even though it didn't hit a dollar, it was still very impressive.

Third, Elon Musk, December 2020, price: $0.003 cents each. This is where Elon Musk tweets his support for Dogecoin with just one word: "Doge." Sure enough, this increased the price 30% in 24 hours, and that is where things started getting out of control. Fourth, Reddit January 2021, price: one cent each. Just like Wall Street Bets turned their attention to GameStop and AMC, causing the price to skyrocket, they also turned their attention to Dogecoin, which further soared another 600% to a value of nearly four and a half cents each.

Fifth, Elon Musk again, February 2021, price: seven and a half cents each. Just as the Reddit craze for Dogecoin began to stabilize, Elon Musk tweeted his support again, calling it "the people's crypto" causing the price to go up almost 50% instantaneously. Six, Doge Day, April 20th, 2021, price: 36 cents each. Leading up to this was a huge push of excitement supported by Elon Musk continually tweeting about putting Dogecoin on the moon, billionaire Mark Cuban speaking in favor of it, and a multitude of other businesses voicing their support to eventually accept it as payment. That caused the price to go parabolic, and the more media attention it got, the higher it went, which gave it more media attention, and the cycle continued.

Seventh, the perfect storm, May 2021, price: 72 cents each. I call this the perfect storm because multiple catalysts all converged at the exact same time, causing it to almost hit a dollar. Several brokerages all incorporated Dogecoin under their platform, and with Elon Musk's SNL skit, many people believed that the mere mention of it would cause the price to exceed a dollar. However, we have, eighth, the crash, June 2021, price: 30 cents each. Shortly after the Dogecoin SNL episode, Robinhood trading temporarily crashed from all the activity, causing the price to quickly and substantially fall.

At the same time, the entire cryptocurrency market began to fall from environmental concerns along with security risks when the U.S. seized a $2.3 million Bitcoin ransom. Ninth, the crypto bear market, June 2022, price: eight cents each. As the Federal Reserve began pulling back on their stimulus and raising interest rates, investors took a risk-off approach as they sold their speculative investments, causing the price to fall. At the same time, investor enthusiasm for meme coins began to dissipate, sending Dogecoin, as well as nearly every other cryptocurrency, into a slow decline where the bottom is anyone's guess.

So, where do we stand as of today? Well, in the past, Mark Cuban stated that meme coins like Doge only work if they gain utility and users use them for that utility. Or, in other words, because there's an infinite number of Dogecoin that can enter circulation at a rate of 5 billion a year, the only way for it to consistently stabilize or increase in price is for more people to buy in and use it. Of course, in terms of its growing popularity, WordPress recently announced that they would allow Dogecoin to be used as a form of payment. Gucci is rolling out Dogecoin options in store, and Elon Musk stated that SpaceX would soon be accepting Dogecoin for merchandise.

However, the co-creator of Dogecoin recently had some choice words to say in regards to SpaceX, saying, "Elon Musk was and always will be a grifter." But the world loves grifters. They love the idea that they may also be a billionaire one day, and that's the dream he's selling.

So, in terms of where we are right now, as well as the performance of my own cryptocurrency portfolio, let's get a one-year update for the Dogecoin millionaire himself and see exactly how much his position is worth.

"Okay, so now do you regret holding so long?"

"Yeah, you know, I’m human. Uh, yeah, I should have sold some."

[Laughter]

"What if it doesn't recover though?"

"If it doesn't recover, see, I look at Dogecoin as like a savings account, and I know that's very, uh, what's the word I'm looking for—that's very irresponsible. But my plan is this, especially for this year—I'm going to continue investing. I'm going to continue buying crypto, but I'm going to lean harder on Ethereum, on Bitcoin, you know, probably some Cardano. Are you doing any other investing in the stock market? Have you thought about maybe a good index fund?"

"Honestly, my biggest purchase in the stock market was Tesla. So, if I was to go back into the stock market, I'd probably buy Tesla. I'd probably buy Facebook. I'd probably buy some Apple. Like these are just long-term holds for me regardless. But no plans for like a good index fund, no, I'm not."

"Why didn't you sell?"

"I would have felt like an impostor, you know what I mean? I'm over here preaching and telling people Dogecoin is the way and cryptocurrency is the future, and I just sell out as soon as I’m able."

"Do you think with your following that you're encouraging risky behavior of speculative cryptocurrencies or maybe things that have a high probability of going up and down?"

"I don't tell people to YOLO. I don't. That's not what I preach. I'm not—I'm not like everybody YOLO—like just throw all your money away. Like, no, I'm not doing that."

"How do you deal with all the negativity or any of the I told you so comments or made a big mistake you should have listened? How do you?"

"I'd get those almost daily."

"Yeah, when you lay it all out, I'm in a better place today than I was a year ago. I've made other investments, you know what I mean? I moved to Vegas, I got a house, I'm buying a Tesla."

"You mean you're buying a Tesla?"

"I'm gonna buy a Tesla."

"Why? Because I want a new car."

"What, a Tesla?"

"Yeah, why not?"

"What happened? You're driving a perfectly great car. I liked your car."

"Why is it gonna be a Tesla?"

"There's no AC, man."

"There's a lot of cars that have air conditioning."

"You know my actual dream car is though? DeLorean."

"Yeah, you can tell people that. You're trying to go back in time."

"I was just thinking that right now."

As far as my thoughts: on the one hand, it's not hard to believe that in 2021 some speculative markets just got wildly ahead of themselves and now we're seeing a new baseline value that's yet to find its true footing, even though, yes, it is down about 90% from the peak. So are quite a few speculative stay-at-home stocks.

Although, to provide a balanced argument both for and against its future as a currency, here's what I have to say. On a positive note, one, Dogecoin is actually pretty good when you use it for transactions. It's said that Dogecoin averages around one minute to add a new block of transactions to the Dogecoin blockchain, making the Dogecoin network more than nine times faster at processing transactions than Bitcoin. On top of that, the transaction fees are significantly lower than Ethereum, making it a better way to pay for small transactions.

Second, anecdotally, there's quite a few people who believe it'll follow the same trajectory as Bitcoin, which routinely crashes 70% to 90%, consolidates, and then hits a new all-time high. So why not with Dogecoin, which has also risen, fallen, and recovered in the past? Not to mention, even today, after dropping from the peak, it's still significantly higher than it was just over a year ago.

Third, I've also rarely ever seen a community as strong as Dogecoin. It seems to be held by the people who really believe in the principle—they stand behind the message and they want to see it succeed. And I believe it's those people who make Dogecoin what it is today.

However, all of that doesn't necessarily mean it's a good investment. And in terms of the downsides, here are my thoughts. First, if it's ever going to be taken seriously as a currency, that can't happen until the price stabilizes. The fact is very few retailers would want to accept it as payment beyond a marketing ploy when its price fluctuates plus or minus 20% in a week.

So, in my opinion, the real value of Dogecoin is gonna come when people move on to something else, they forget about it, and then it'll have a chance to find its true value. Second, just because it's always recovered and gone up in the past doesn't mean it always will. The reality is, for every example of Bitcoin, there are dozens or hundreds that rise, fall, rise, fall, and then just never go anywhere.

It's always possible that history doesn't repeat itself, and it's up to you to understand the risks of investing in something as volatile as this. And third, in terms of value, there's not a cap on supply, meaning the number of Dogecoin in circulation could be limitless. This makes it significantly more difficult to go up in price without a lot more people buying in all at the exact same time.

It's kind of like trying to run up an escalator that's going down. It's possible under the right circumstances, but it's not sustainable to keep that up long-term. That's why I believe that Dogecoin is going to have a very difficult time ever reaching a dollar without a significant push of enthusiasm at a level that we have not seen. Although long-term, who knows? Anything can happen, and I've been surprised in the past.

But for me, it's not something that I could really wrap my mind around, besides being a fun alternative store of value and potential investment under the right conditions. However, just be prepared to lose everything.

As far as my own Dogecoin investment, I promised that if my video got a hundred thousand likes back in May of 2021, I would buy $10,000 worth of Dogecoin and hold onto it for a year, though I didn't think we would actually get a hundred thousand likes. But we did, and as promised, I bought it. Today, that $10,000 investment is worth $1,800. I had a loss of 82%. At this point, I had no intention of selling, and the point of the video was just to have a fun experience that I could report back on for everyone who hit the like button. But yeah, it turned out to be a very expensive video.

So, if you appreciate the openness and transparency, it would mean a lot if you hit the like button on this video and subscribe to see whether or not that investment ever recovers.