This 33-year-old invested his savings in the meme cryptocurrency with inspiration from Elon Musk Crypto Currancy

Glauber Contessoto says that on April 15 at 6:00 p.m. PDT, he turned a dogecoin millionaire.

“I used to be up all evening observing my display screen,” Contessoto, 33, tells CNBC Make It.

After studying in regards to the meme cryptocurrency on Reddit, Contessoto says he invested over $180,000 in dogecoin on Feb. 5, when it was priced at about 4.5 cents.

Contessoto was intrigued by dogecoin for a number of causes.

For one, he liked the Reddit neighborhood surrounding the digital coin, as its base had grown considerably since dogecoin’s creation as a joke in 2013. He additionally appreciated that it was impressed by the Shiba Inu “Doge” meme, he says.

And like many holders of dogecoin, “a motive why I put my financial savings into dogecoin is Elon Musk,” who has repeatedly tweeted about the cryptocurrency. Although it’s unclear if Musk’s tweets in assist of the coin have been critical, “I feel the man is a genius,” Contessoto says.https://platform.twitter.com/embed/Tweet.html?creatorScreenName=itstaylorlocke&dnt=false&embedId=twitter-widget-0&options=eyJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X2hvcml6b25fdHdlZXRfZW1iZWRfOTU1NSI6eyJidWNrZXQiOiJodGUiLCJ2ZXJzaW9uIjpudWxsfX0percent3D&body=false&hideCard=false&hideThread=false&id=1382552587099062272&lang=en&origin=httpspercent3Apercent2Fpercent2Fwww.cnbc.compercent2F2021percent2F04percent2F22percent2Freddit-trader-im-a-dogecoin-millionaire-inspired-by-elon-musk.html&sessionId=9a5e3040974c577c9a9f00f670cc0f69e33c0344&siteScreenName=CNBC&theme=mild&widgetsVersion=ff2e7cfpercent3A1618526400629&width=550px

Above all, Contessoto may be very bullish on dogecoin’s progress, and thought that it might assist him construct “generational wealth” to move on to his future household. “I grew up actually poor,” he says, “so this can be a large deal for me.”

Contessoto (who works at a music firm in Los Angeles) says he didn’t have disposable revenue to purchase dogecoin, so he took an enormous threat. Contessoto not solely used all his financial savings, however he additionally offered all of the inventory he owned, together with shares of Tesla and Uber, and invested on margin by borrowing money from Robinhood by way of the app, he says.

His associates had been essential of the meme cryptocurrency and warned him to watch out.

“Dude, it’s a pump-and-dump [scheme],” considered one of his associates mentioned in a textual content message. “It’s going to zero, ultimately.”

Specialists are equally very skeptical of dogecoin, which they are saying is highly speculative and a so-called meme commerce based mostly on social media buzz. They warn that traders could get burned.

As an illustration, Mike Novogratz, a crypto bull and founder and CEO of Galaxy Digital, informed CNBC’s “Squawk Box” on Tuesday that bitcoin is “a well-thought-out, well-distributed retailer of worth that’s lasted for 12 years and is rising in adoption, the place dogecoin actually has two guys that personal 30% of all the provide.” Bitcoin additionally has an intensive and well-funded ecosystem that doesn’t exist with dogecoin, he mentioned.

As well as, dogecoin doesn’t have a provide cap like bitcoin does, all of this making it a much more risky funding, in response to specialists.

Nonetheless, Contessoto caught along with his funding plans after which continued to carry the cryptocurrency.

About two months later, on the night of April 15, the worth of dogecoin started to surge. That week, dogecoin spiked 400%, and on April 16, it defied odds because it hit a market capitalization of $49 billion, in response to CoinGecko. Dogecoin in the end reached a file excessive of round 45 cents.

Some speculate that the rally was a results of cryptocurrency change Coinbase going public on April 14, which additionally drove an increase in the prices of bitcoin and ether. Others attribute dogecoin’s spike in worth to tweets by Musk that nod to the favored crypto-slang phrase “to the moon.”

Regardless of the case, Contessoto realized that meant his dogecoin funding had grown to be price over $1 million.

“I used to be enthusiastic about it. I used to be very new to Reddit, so I wished to make a submit,” he says.

The following day, underneath his username iUsedToCallDogeDodge, Contessoto posted on subreddit r/dogecoin. He wrote, “Hey guys I simply turned a dogecoin millionaire,” and hooked up a screenshot of his dogecoin holdings on Robinhood, exhibiting a steadiness of $1,081,441.29.

“It went viral,” he says.

Although this was an unusual surge for the cryptocurrency, Contessoto doesn’t intend to promote anytime quickly.

“My plan is, as soon as I hit $10 million, then I’ll take out 10%,” he says. In his opinion, “these items goes to proceed to develop.”

Dogecoin started to lose steam on Tuesday, and now, the cryptocurrency is buying and selling at about 28 cents, in response to CoinGecko, with a market worth of about $36 billion.

Regardless of the decline, Contessoto remains to be “hovering over $1 million,” he says.

Eight years in the past, dogecoin was created as a parody faster and “fun” different to bitcoin by software program engineers Billy Markus and Jackson Palmer.

Although some retail investors have profited from its latest surge, experts warn that folks ought to solely make investments what they will afford to lose.

″[T]he bubble ultimately has to burst and also you’re going to be left shortchanged for those who don’t get out in time,” David Kimberley, an analyst at U.Ok. investing app Freetrade, recently told CNBC. “And it’s virtually not possible to say when that’s going to occur.”