U.S. Federal Reserve Chairman Jerome Powell recently hinted at Dogecoin, saying that capital markets are “frothy.”
What the U.S. government said about Dogecoin
Powell said recent internet-based cryptocurrency crazes — like the Dogecoin or Bitcoin boom in recent weeks — might provide a potential risk to financial stability for people, according to Yahoo! Finance.
- “Some of the asset prices are high. You are seeing things in the capital markets that are a bit frothy. That’s a fact,” he said.
- “The overall financial stability picture is mixed, but on balance it’s manageable,” he added.
Per CoinDesk, this is a direct reference to the Dogecoin and cryptocurrency spikes that have occurred in recent weeks.
“In a bid to combat the fallout from COVID-19, central banks around the world have continued to flood new money into financial markets which, in turn, has had a major impact on cryptocurrency through asset price inflation,” according to CoinDesk.
Dogecoin continues to rise
Powell’s comments come as cryptocurrencies continue to rise in value. Dogecoin recently spiked in value again after Tesla CEO Elon Musk and Dallas Mavericks owner Mark Cuban tweeted about it to the public, according to CNBC.
Cuban’s tweet actually mattered a lot. He said that one of the problems of Dogecoin is that it can’t be used to buy things. He suggested that the “greatest inhibitor to its growth is that you can’t spend the Doge you buy on Robinhood,” Cuban tweeted.
- Not long after, Robinhood CEO Vlad Tenev said the Robinhood app — which allows you to buy and sell cryptocurrency — may soon allow people to use their Dogecoin holdings, the Deseret News reported.