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Dogecoin Whale? Why Robinhood May Be The Biggest Owner, According To Reports

Parts of the cryptocurrency market are abuzz about a large owner of dogecoin, following a spectacular surge in prices of the digital currency that began as a joke.Enter your text here...

On Wednesday, Bloomberg wrote a piece speculating that popular brokerage platform Robinhood Markets may be the owner of a cache of dogecoins worth some $2 billion, citing blockchain tracking entity Elliptic.

“It almost certainly belongs to Robinhood,” Tom Robinson, chief scientist and co-founder of Elliptic, was quoted as saying in a Bloomberg interview published on Wednesday.

The report comes as The Wall Street Journal also on Wednesday reported on the stack of coins, representing about 28% of all of the dogecoin in circulation.

Identifying the mysterious owner of the coins has become a bit of a parlor game in crypto trading circles and comes as the crypto asset, which was created in 2013 and was satirically associated with the shiba inu dog, has experienced a stratospheric gain since the start of 2021.

Dogecoins are up around 900% since the start of 2021. By comparison, bitcoins BTCUSD, -7.83% are up by about 80% over the same period, gold prices GC00, 1.88% are down more than 6% and the Dow Jones Industrial Average DJIA, 0.17% and the S&P 500 index SPX, -0.53% are up 2.5% and 3.8%, respectively, FactSet data show.

It is nearly impossible to identify holders of cryptos because such assets are designed by programmers to support anonymity, which is one major indictment of the nascent sector.

The WSJ article implied that Tesla Inc. CEO Elon Musk, the technologist who has been one of the bigger catalyst for dogecoin’s recent surge, could be the owner of the $2 billion block of dogecoin, suggesting that the address associated with the trades “has on multiple occasions received 28.061971 dogecoins. Mr. Musk’s birthday is on June 28, 1971.”

Musk is credited by some for helping light a fire under the cryptocurrency after a series of seemingly bullish tweets, like this one from late December: “One word: Doge.”

In early February, he inspired another hefty rally with a spate of tweets in which he referred to dogecoin as “the people’s crypto,” and shared a picture of a rocket to the moon with one word.

However, Musk has referred to talk of the dogecoin whale as representing a “disturbing concentration” in the asset and has recommended that owners sell their stakes to help the greater dogecoin community,

Elliptic’s Robinson, meanwhile, makes the case that the large stake in dogecoin coincides with the creation of a storage account and the subsequent decision by Robinhood to offer dogecoin trading to its customers in July of 2018.

In response to questions about the validity of this claim, Robinhood on Thursday referred MarketWatch to its exchange via Twitter, saying that it fully intends “to provide the ability to deposit and withdraw cryptocurrencies, including DOGE,” at some point.

“Robinhood Crypto does NOT currently invest in cryptocurrency or use any customer cryptocurrency for our own benefit,” the brokerage wrote.

Robinhood added that “cryptocurrencies purchased and owned by our customers are held and custodied in our wallets for the benefit of our customers.”

Crypto experts have warned that dogecoin, pronounced “dōj-coin,” has limited utility compared with other decentralized cryptographic assets, including bitcoin.

Talk of the dogecoin whale comes as Robinhood is set to face a grilling in front of the U.S. House Financial Services Committee later Thursday, where it will attempt to defend its decision in late January to temporarily restrict trading in so-called meme stocks, including GameStop Inc. GME, 9.01%.

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