The Breakdown - The Crypto Industry Lights up for DOGE (The New DOGE, That Is)

Episode Date: November 14, 2024

Elon Musk and Vivek Ramaswamy are leading the new Department of Government Efficiency. Yes what started as a meme has matured into a wrecking ball headed for Washington bureaucracy....or to an early failure, depending on who you ask. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, November 13th, and today we are talking about Doge, not the coin, the new government office. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link of the show notes or go to bit.ly slash breakdown pod. Well, friends, I am old enough to remember all the way back in January 2021 when Elon Musk then just a passionate user of Twitter, not yet the owner, wrote on that platform, in retrospect, it was inevitable.

The tweet was sent at 3.22 a.m. Eastern Time. And it was, of course, about his looming Bitcoin purchase at Tesla. It would be that purchase that ignited the last leg of the Bitcoin. run-up in that cycle. It would also be Tesla reversing course and deciding that they were not going to accept Bitcoin for payment because of environmental concerns that would halt the momentum, but I've often had context to think about that tweet as it so often sums up the latest thing to happen to or buy Elon. The latest moment that would seem like with anyone else a complete flight of fantasy, but with Elon seems like an inevitability, was the fact that he has managed to meme a

government department into existence. Yesterday, an announcement post started flying around that many thought was at first fake. The post reads statement from President Donald J. Trump, I am pleased to announce that the great Elon Musk, great capitalized by the way, working in conjunction with Capital American Capital Patriot Vivek Ramoswamy, will lead the Department of Government Efficiency or Doge. Together, these two wonderful Americans will pave the way for my administration to dismantle government bureaucracy slash excess regulations, cut wasteful expenditures, and restructure federal agencies, essential to the Save America movement. This will send shockwage. through the system and anyone involved in government waste, which is a lot of people, stated Mr. Musk.

Now, at this point, you probably are thinking, sure, that sounds like Trump's writing, though, strange capitalizations are totally on brand, but could this possibly be real? It continues, though. It will become potentially the Manhattan Project of our time. Republican politicians have dreamed about the objectives of Doge for a very long time. To drive this kind of drastic change, the Department of Government Efficiency will provide advice and guidance from outside of government, and will partner with the White House and Office of Management and Budget to drive large-scale structural reform and create an entrepreneurial approach to government never before seen. The statement concludes, I look forward to Elon and Vivek making changes to the federal

bureaucracy with an eye on efficiency and at the same time making life better for all Americans. Importantly, we will drive out the massive waste and fraud which exists throughout our annual $6.5 trillion of government spending. They will work together to liberate our economy and make the U.S. government accountable to we the people. Their work will conclude no later than July 4th, 2006. A smaller government with more efficiency and less bureaucracy will be the perfect gift to America on the 250th anniversary of the Declaration of Independence. I am confident they will succeed. So here's the most important thing to know about this. It is real. Despite many people seeing this and thinking that can't possibly be real, it was, in fact, a true statement from President-elect

Donald Trump. Now, there is, of course, lots we don't know about this. We have no idea how the department would be set up. If it's to be a formal government agency, it would presumably require an act of Congress. We don't know how Elon Musk will square the conflicts of interest between a government role and his status as the CEO of multiple government contractors. Presumably, he would technically be a consultant rather than a government official, but of course, that's not really going to be the big question. I think what's most important to note is that while the name may be a meme, the mission very clearly is not to those involved. Elon Musk tweeted, either we get government efficient or America goes bankrupt. That's what it comes down to. Wish I were wrong, but it's true.

He also tweeted, All actions of the Department of Government Efficiency will be posted online for maximum transparency. Anytime the public thinks we are cutting something important or not cutting something wasteful, just let us know. We will also have a leaderboard for most insanely dumb spending of your tax dollars.

This will be both extremely tragic and extremely entertaining. The entertainment value will be epic. Vivek reinforced this message of openness saying, Doge will soon begin crowdsourcing examples of government waste, fraud, and abuse. Americans voted for drastic government reform

and they deserve to be part of fixing it. He added, over the last two years, the Supreme Court has ruled that the administrative state is behaving in wildly unlawful ways, but slapping the bureaucracy on the wrist won't solve the problem. The only right answer is a massive downsizing. And it's undeniable that generally there is a sense that voters gave Trump a mandate. And part of that mandate these folks believe is to slash government waste. And in fact, the mission of the organization is receiving lots of excited discourse. Charlie Kirk, the founder of Turning Point USA, commented, the creation of Doge will be the first federal program whose goal is to eliminate itself. It exists to shrink government not grow it. This is a profound historic step back to the founder's vision for America. The media establishment is working overtime to try to figure out what the heck is going to happen.

For example, the Washington Post suggests that although the organization has the word department in its name, it will actually work as an advisory body operating outside of government. They write, the commission will provide guidance to the White House on cutting spending working with the White House Office of Management and Budget. Now, this being mostly a Bitcoin show, we will, of course, get into the implications for the crypto industry. But I want to take a little detour into some of the origin. of Trump and his support from unexpected circles all the way back in 2016. Trump rose to power, of course, as an outsider candidate. In that election cycle, there was the Bernie Sanders insurgency

on the one side and the MAGA insurgency on the other. One of the early supporters of Trump that was at the time somewhat unexpected was Peter Thiel. In an essay called Why Peter Thiel really supports Trump, the Wall Street Journal wrote, Mr. Trump is a wrecking ball at a time when Washington needs a wrecking ball. It needs a candidate whose very existence forcibly disrupts its ways and patterns. To me, the Doge announcement is an expression of the fact that it is in this administration that that wrecking ball is most likely to actually come into existence. It's worth noting as well that while the normal Elon Rorschach test is holding true, in other words, anything that Elon gets involved in is mostly a referendum on what people think

about Elon rather than what people think about the thing, there are also at least some indications that not every Democrat hates this idea. Dean Phillips, who had offered himself as sacrifice to try to unseat Joe Biden from within his party before the switch to Kamala happened, tweeted this morning, I'm a Democrat for government efficiency. Suffice it to say, I am quite interested to see how this actually plays out. If you need any sense of the seriousness with which these folks are taking it, Vivek, who has extraordinary political ambitions, as we've seen, is basically taking himself out of the running for a likely appointment to the Ohio Senate seat vacated by J.D. Vance in order to take on this work. He thinks that there's enough of a

here here that he's going to get more done in this role than he would as a senator. All right, but enough of the government side of this. Let's talk about the crypto side of this. Despite the fact that the name had nothing to do with Doge coin, the trade that has worked for the last five years or so, which is by Doge when Elon says Doge, continues to work. Dogecoin has now more than doubled since the election and is up almost 4x since Elon began talking about the idea for this new department back in September. Currently trading it around 40 cents, this is the highest Doge has been since Elon's S&L appearance in May 2021. It has, of course, brought up that age-old question, could this be the thing that finally drives Doge to reach $1 per coin? Real Vision CEO Rao Paul thinks it's time to switch

off your brain and mash the green button, tweeting, the meme lord actually calls his department Doge and then puts a bloody banana on his rocket ship to space and you're nervous of owning crypto at this stage in the cycle anon? No one owns enough, but the window to buy is closing fast. Crypto Paradigm tweeted, Elon realized his Doge tweets were losing potency, so he started an entire new government department to pump our bags. A moment later, he realized, oh no, it's a local top signal. There's even very serious analysis being drawn from the pump. 50-year veteran technical analyst Peter Brandt is drawing lines in the Doge chart and comparing it to Bitcoin in 2016. Macroscope thought a little bit deeper and commented, the only reason something like Doge is worth

looking at right now. It's run-up related to Trump's announcement is an indication of how the current market, meaning thousands of global institutions with a hell of a lot more. capital, is ready to react to far more consequential news to come on Bitcoin. If this incoming administration is willing to put out a press release with the specific term Doge, what are they preparing to do on something real like BTC? Ultimately, maybe the most salient conclusion came from Chow Wang of Alliance Dow who said, Doge is now the official meme coin for the government of the United States of America. Whether you find yourself right now hollering to the moon with excitement or crying into your sheets, the one thing that is undeniable is that America in the next four years,

will not be boring. That's going to do it for today's breakdown. Until next time, be safe and take care of each other. Peace.