Su Zhu, the creator of the Uncommon Core podcast, released an episode of that podcast Wednesday, Aug. 25, in which he expressed a very bullish view of dogecoin. 

Su Zhu, the CEO of the crypto hedge fund Three Arrows Capital, says dogecoin has a community aspect that other cryptos don’t have. “Its memes are simple,” he said. “The man who drinks beer can understand it, the girl who posts selfies can understand it and she can just put her money in it and outperform everybody,”

Dogecoin is affordable to everyday investors, it is accessible, and the name is universally recognized. 

Dogecoin is a Tricky Game to Play

The podcast featured Jordi Alexander as a guest. Alexander is a former professional poker player. For most of the episode, Su and Alexander discussed game theory and how it throws light on the crypto markets. This discussion specific to Dogecoin begins more than an hour in.

Alexander cautioned that dogecoin is a tricky game to play. Success requires a community with cohesion. As soon as there is a deserter from the bullish community, he said, “as soon as that pump-and-dump dynamic gets created, the thing falls apart.”

Alexander said that Elon Musk has played the role of a leader for this community, which has helped with the necessary cohesion, but he expressed doubts about Musk’s reliability.

This is where Su Zhu offered his own commentary, as a bullish counterpoint to Alexander’s caution.    

Su Zhu began with the observation that Robinhood has become a “doge proxy.” And Robinhood is the “most blue collar style” of investing out there, which indicates that doge also has broader working-class appeal. Photo credit: Shutterstock.com

Su Zhu began with the observation that Robinhood has become a “doge proxy.” And Robinhood is the “most blue collar style” of investing out there, which indicates that doge also has broader working-class appeal. 

Doge is underestimated because people underrate the value of its “virality,” he said.

The Pros and Cons of Doge

As to Musk, Su and Alexander concur that Musk is both a strength and a weakness for Doge. But on net, Su sees Musk as a positive and a part of the bullish case. 

Summarizing what he takes to be Musk’s view, Su says that Musk sees Bitcoin as a gold standard in the crypto world, but Doge as silver. In the late 19th century, William Jennings Bryan proved that the coining of silver had a broad populist appeal, by people (farmers and workers) who believe that they have been oppressed by east coast bankers. 

Musk, then, is playing Bryan’s role here, and, bullishly, Su is cheering him on as he does so.     

In the podcast, Alexander is not convinced by this and remains cautious. He says that doge is seen as something that provides entertainment and, sometimes, a welcome win in a financial game. But to reach the “next level” it will have to become a store of value: a mother saving for her child’s college fund must be willing to put that fund into doge. 

He doesn’t see that happening. 

Su replies, “It’s already happened.” If people were not willing to treat doge as a store of value, it would not have the volume on Robinhood that it has, and Robinhood would not have become the doge proxy that it has. 

A Feature or a Bug?

As of writing, DOGE is worth just $0.27. This is well below its springtime peak at $0.68, but an improvement upon its long July in the doldrums of $0.20 or lower. 

DOGE has done surprisingly well now for a crypto that began in December 2013 as a joke inspired by the Shiba Inu (a breed of dog) as an internet meme.

One distinctive feature of DOGE is that there is no limit to the number of coins that may be minted. This means that it is subject to unlimited inflation, a fate all other cryptos — even the otherwise unorthodox Y Coin, are designed to avoid.

One way to read the difference in views between Su and Alexander is this: Su is suggesting that DOGE’s vulnerability to inflation may actually be a feature, not a bug.

Alexander is saying, in accord with the more common views: no, it is a bug. People naturally want to use a hedge against inflation as a store of value, as in the maintenance of a college fund.