Exclusive: Dogecoin Investor Becomes Millionaire After Putting Life Savings Into Meme Crypto

A Dogecoin investor has told Newsweek of how he became a millionaire after investing his life savings in the meme cryptocurrency. Meanwhile, an expert has warned about the risks of doing so.

The 33-year-old Los Angeles resident, who wanted to remain anonymous, claimed he invested all of his $188,000 life savings into it in February this year.

Since then the coin has risen sharply in value as cryptocurrencies in general have grown in popularity, and thanks to support from influential figures such as Elon Musk.

In the last 24 hours alone, DOGE has risen in value by over 200 percent, and 435 percent over the past seven days. It is currently worth a record high of over $0.40 per token.

As a result the investor said his initial investment has grown to almost $2 million.

In a video shared with Newsweek, the user showed a screen recording of his Robinhood trading portfolio taken back when Dogecoin was worth $0.05 in February. He concluded the video with: "Clearly the volatility is very high, so I am not a financial advisor, this is not financial advice—purely entertainment."

He had purchased just over five million of the tokens. Screenshots seen by Newsweek showed the total value had increased to $1,881,533 by Friday morning ET.

Newsweek was not given direct access to the investor's Robinhood account and was therefore unable to verify what was shown in the screenshots and video.

The investor first shared the news he had become a millionaire in a Reddit post on Thursday. It gained nearly 70,000 upvotes on the website.

He told Newsweek: "I feel absolutely incredible right now. I grew up very poor, I don't come from money so I've worked dead-end jobs throughout my life to make ends meet.

"I currently have a regular 9 to 5 job right now and I basically live paycheck to paycheck. I also own a super beat-up 2004 Toyota Corolla that has over 200K miles on it and completely falling apart."

He first started investing in the stock market years ago, incrementally putting bits of his paycheck into shares he thought were undervalued. He also said the rallies on GameStop shares earlier this year following investment by Reddit users influenced his outlook.

"That showed me that Wall Street is rigged and the system is flawed and caused me to research other forms of investments.

"I discovered Dogecoin, and after doing some intensive research for about a week on all the pros and cons of the crypto I decided it was also highly undervalued and sold all my stocks and emptied out all my savings accounts and put every last dollar that I've ever made into Dogecoin. The rest is history."

For now, the investor said he does not want to sell his Dogecoin though he could if he wanted. Newsweek has contacted Robinhood, the trading platform the investor used, to confirm whether it is possible for users to withdraw cryptocurrency for traditional money.

Instead, he will hold his investment for at least a year to avoid paying short-term capital gains tax and pay the cheaper long-term tax instead. Afterwards, he plans to take out around 10 percent while seeing what happens to the rest.

He also plans to start a YouTube channel, "The Dogecoin Millionaire," and sell merchandise via a website of the same name.

"I am not an institutional investor, nor am I a hedgefund," he said. "I do not have clients and I do not provide personalized investment advice for fees or commissions. I'm just an individual whose investment in Dogecoin and posts on social media were based upon my own research and analysis.

"As for me, I like the coin, I'm as bullish as I've ever been on Dogecoin and I remain invested in the crypto."

His comments came after Dogecoin creator Billy Markus told Newsweek he believes it is possible for the cryptocurrency to reach $1.

Despite some diehard supporters, analysts have voiced concern about the technology's price volatility.

Glen Goodman, author of The Crypto Trader and an investment expert, told Newsweek: "Buying dogecoin is closer to gambling than to investing. There is no way to work out a fair valuation for DOGE, particularly as very few people actually use it for real-world transactions.

"DOGE has come a long way, but there's nothing to stop it one day crashing to almost zero. Probably when Elon Musk gets tired of tweeting about it.

"Sensible cryptocurrency investing is about making profits while keeping your risk level strictly under control. I saw many traders who'd enjoyed overnight success destroy their accounts when Bitcoin crashed in 2018.

"No doubt the same thing will happen again to all those who don't take care."

David Kimberley, an analyst for investing app Freetrade, told CNBC people are buying Dogecoin in the hope others will do the same, and not because it has any "meaningful value."

He said: "When everyone is doing this, the bubble eventually has to burst and you're going to be left short-changed if you don't get out in time. And it's almost impossible to say when that's going to happen."

After the token reached a record high, Dogecoin co-founder Billy Markus tweeted Thursday: "For real though guys keep some rationality when gambling on highly volatile assets like cryptocurrency.

"Euphoria is a helluva drug, but y'know, at least keep paying your bills and feeding your family and have a safe rainy day fund."

This article has been updated to include Glen Goodman's comments. It has also been updated to clarify Newsweek could not verify the millionaire investor's claims.

Person holding visual Dogecoin representation
A person holds a visual representation of digital cryptocurrency Dogecoin, on January 29, 2021 in Katwijk, Netherlands. The token hit an all-time high this week. (Photo by Yuriko Nakao/Getty Images) Yuriko Nakao/Getty