During his recent interview on the Lex Fridman podcast, Ethereum co-creator, Vitalik Buterin, mentioned that he profited by more than $4 million from a $25K investment that he put into Dogecoin (DOGE) in 2016.
After making all that money within three years, he decided to give it all to charity. Dogecoin was launched in December 2013 and aimed to capitalize on the huge popularity of the then-popular Shiba Inu-inspired doge meme. In this interview, Vitalik described DOGE to be among the first “fun coins” launched into the nascent crypto-asset ecosystem.
Even though he acknowledged that he was quite impressed by the community that had formed around DOGE, Vitalik mentioned that the lack of an investment thesis made him sell some of his DOGE. He explained:
“At the beginning, people didn’t take it very seriously […] I just remembered thinking to myself, how am I going to explain to my mum that I just invested $25,000 into Dogecoin […] like the only interesting thing about this coin is a logo of a dog somewhere. But of course, that was one of the best investments I have ever made.”
Even though Buterin said that DOGE did quite well over the years that followed, he remembered being caught off-guard by the major speculative frenzy that resulted from Tesla CEO Elon Musk’s fascination with this meme coin.
Musk’s fascinating interest in DOGE seemed to come up after a 2019 community vote that mentioned the billionaire investor to be the project’s most-desired hypothetical CEO in 2019. The vote happened four years after Dogecoin’s founder decided to abandon the project completely. Buterin said:
“At the end of 2021, Elon Musk started talking about Dogecoin, and the market cap just shot up to $50 billion […] It shot up multiple times.”
He also remembered being in lockdown in Singapore when the price of DOGE exploded by 775% from around $0.008 to $0.07 within a day, thinking:
“Oh my god, my DOGE is worth, like, a lot! I immediately called up some of my friends and told them to drop everything and scramble, and I sold half of the DOGE and I got $4.3 million, donated the profits to GiveDirectly, and a few hours after I did this the price dropped back from around $0.07 to $0.04.”
After he sold half of his DOGE at the local top, Vitalik said that he felt like an amazing trader until the price of the coin went up from $0.04, then to $0.07, then to $0.50. If he held onto the remaining 50% of the DOGE funds, the Ethereum co-founder would today be holding almost $20 million worth of the token.
Despite backing this project relatively early into its development, Buterin insisted that he did not expect that Dogecoin would attract mainstream imagination and turn into one of the leading crypto assets by market capitalization:
“DOGE becoming this big phenomenon, where there’s even a lot of people that have heard of DOGE that have not heard of Ethereum, is something that even I was not predicting.”