Bitcoin Wannabes: Market Analyst Warns of Increased Risks in the Crypto Market, Likens Dogecoin Expansion to the Dot-Com Bubble

Bloomberg Intelligence’s lead commodity strategist has warned of rising risks in the cryptocurrency market. In his recent statement, McGlone highlighted the presence of “2.4 million so-called cryptocurrencies” in the market, which he referred to as “Bitcoin wannabes.”

McGlone's analysis pointed to Dogecoin, a cryptocurrency with a market capitalization of $68 billion, which he included among those he believes lack Bitcoin's fundamentals. He likened its growth to the dot-com bubble, suggesting that most of them might collapse similarly over time.

“Dogecoin is among the 2.4 million so-called #cryptocurrencies that future generations may look back upon akin to the dot-com bubble.”

McGlone

’Unlimited supply cryptos’ face an uncertain future

McGlone's critique also targeted what he termed “unlimited supply cryptos,” which includes Dogecoin and other altcoins. He noted that this poses a significant disadvantage compared to Bitcoin, which has a hard cap of 21 million in its code. He indicated that some of these currencies might not be in a position to challenge Bitcoin, given the latter's status as a store of value asset.

The strategist's analogy to the dot-com bubble further underscores his concerns. In the late 1999s, internet-based companies propped up an overheated market that crashed. According to McGlone, coming generations may look at the 200 meme coins and smaller altcoins in a similar light.

Moreover, Dogecoin's market capitalization recently hit $55 billion, which is equal to the valuation of Bank of New York Mellon, one of the oldest banks in the U.S. McGlone pointed out that BNY Mellon, which is set to earn $19.1 billion in revenue by 2025, has real earnings. In contrast, Dogecoin, being a speculative asset, has no earnings.

Peter Brandt, a well-known financial trader, shared these concerns. In a recent post, he stated that speculative digital assets are very dangerous for investors. According to Brandt, most investors use high leverage to quickly profit from altcoins and meme coins. He warned that speculative digital assets pose a great risk to investors.

He noted that if the market corrects, Bitcoin could lose half its value, while altcoins might lose up to 90%. According to him, meme coins, which have no real-world applications and are only hyped to gain value, could be entirely wiped out of the market.

Bitcoin trades at $102,000 and Dogecoin at $0.38 at the time of writing. The total market cap increased by 2% to reach $3.66 Trillion.