In his recent appearance on the Lex Fridman podcast, Ethereum co-creator, Vitalik Buterin, revealed he profited more than $4 million from a $25,000 investment that he made into Dogecoin during 2016.
But true to form, he gave it all away to charity.
Dogecoin was created in December 2013 and sought to capitalize on the popularity of the then-popular Shiba Inu-inspired doge meme, with Vitalik describing DOGE as among the first “fun coins” launched into the burgeoning crypto asset ecosystem.
Although he was impressed by the community that had formed around DOGE, Vitalik joked about the lack of investment thesis informing his decision, stating:
“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.”
Although Buterin stated that DOGE “did really well” over the following years, he recalled being caught off-guard by the speculative frenzy that resulted from Elon Musk’s fascination with the meme-coin.
Musk’s interest in DOGE appeared to stem after a 2019 community vote that revealed the SpaceX founder to be the project’s most-desired hypothetical CEO in 2019 — four years after Dogecoin’s founder had abandoned the project.
“At the end of 2020, Elon Musk started talking about Dogecoin, and the market cap just shot up to $50 billion […] It shot up multiple times,” said Buterin.
He recounted being in lockdown in Singapore when the price of DOGE shot up 775% from $0.008 to $0.07 over the course of a single 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 selling half of his DOGE at the local top, Vitalik says he felt like “an amazing trader,” until, “of course, the price went back up from $0.04, then to $0.07, then to $0.50.”
Assuming that Buterin held on to the remaining 50% of this DOGE stash, Ethereum’s co-creator would currently be hodling nearly $20 million worth of the dog token.
Despite backing the project relatively early into its development, Buterin emphasized he did not anticipate that Dogecoin would capture the mainstream imagination and re-emerge as a leading crypto asset by 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.”