DOGE May Be the Only Crypto that Matters

I'm going to start this post with the warning that this is a thoughtful, but definitely crazy thesis. I'd give it a 10% odds, but it's worth articulating and writing up.

Donald Trump has just been elected, with an extremely pro-crypto Administration. Elon Musk bet big and won bigger (see my LinkedIn post), with influence over all three branches of governement. The world has changed.

Bennett J. Lee on LinkedIn: #elonmusk #tesla #spacex

🚀 Elon Bet Big, He Won Bigger No donor in this race had more on the line than Elon Musk. He went "all in", buying Twitter for $55B, studying politics, and…

LinkedInAnnemarie Dalka

In the last week, BTC has broken a key ceiling going from $69k to an ATH of $89k.

The New Meta: Crypto Stabilizing Currency

The new meta is that with Donald J. Trump being elected in a crushing, over the top, landslide victory that the US government will lead the world in securing bitcoin as a reserve asset.

VanEck, an investment management company, has produced a model which suggests that Bitcoin could reach a price of $3 million by 2050 if it becomes a global reserve asset with a 2% allocation by central banks. This was before Trump was elected so we could see sooner.

$3M Bitcoin Forecast: Vaneck’s Model Sees Central Bank BTC Adoption – Markets and Prices Bitcoin News

Bitcoin could reach $3 million, according to asset manager Vaneck, with a model showing its potential as a reserve asset held by global central banks.

Bitcoin NewsKevin Helms

For a helpful refresh of how metas and behavioral economics work, check out my other blog post, "Why People Do What They Do":

Why People Do What They Do

There was a point in my entrepreneurial journey when I had to accept a tough truth: I was terribly wrong at predicting what people were going to do. I had reduced human psychology to a utilitarian model as we’re first taught in school. My model of what people wanted and

Bennett J. LeeBennett Lee

I've been itching to write my masterpiece, "Degenomiks", to explain and integrate behavioral economics and market mechanics, but I've been sidetrack trying to solve sustainable energy and power AI datacenters at Veridian. I'll get to this before the end of the year.

Why this Meta Matters

The meta of the last bullrun was that crypto was useful, it was going mainstream and institutional investors were investing in it. This is why ETH went up and L2 pumped shortly after. Alex Becker and Lady Crypto have a great explanation of the crypto pumping patterns with some great humor. In short:

BTC pumps => ETH pumps => L2s, gaming and degenerate memecoins pump

Why ETH?

The last bullrun, I asked myself, why ETH? It's slow, gas fees are high and there are a whole host of other cryptocurrencies that perform significantly better. My best explanation has been its web traffic. It's second only to bitcoin as it was the first disruptive blockchain innovation to rival bitcoin.

Something's Off...

I made my standard trades and bets. I actually thought ETH was the most undervalued as BTC pumped. I noticed that DOGE was actually more correlated with BTC's breakout but with higher sensitivity. DOGE moves at about 4x BTC.

There is nothing stopping DOGE from breaking its ATH of $0.75. Some may have PTSD and jump ship from there, but others may HODL. Once it breaks out at $0.80, the games begin because "DOGE at ATH" is a major headline.

Given how fast DOGE coin is moving, I predict it will flip ETH and go thermonuclear.

Everything's Different Now

The same principle that made ETH the crypto prince, has now made DOGE the number 2. DOGE is extremely undervalued and by this principle, it will be a leading indicator of DOGE flipping ETH. Ethereum is old news, but any rational fund manager would never see this coming. After a breakout, a quick 3x pump would flip ETH and cause even more chaos and drama further increasing DOGE's attention and thus, liquidity and speculation.

Elon Musk

"A friend of mine always tells me the most ironic outcome is always the most likely. And the most ironic outcome for currency would be that the thing that was made as a joke...making fun of cryptocurrency...becomes the gold currency" - Elon Musk

Elon is a huge fan of DOGE but since he is now influential in the new Trump Administration and the meta right now is the US buying BTC for strategic reserves, that assumption has rippling effects.

Department of Government Efficiency

I also believe that a month ago when Elon announced the Department of Government Efficiency (DOGE) that has piggy-backed on the giant political narrative all across Twitter, massively amplifying the DOGE brand. Department of Education is getting DOGE'd and every time this happens, I suspect DOGE will get more free web traffic and marketing.

Ceiling's Accelerate 🚀

If that wasn't enough of a force vector, every time DOGE approaches a ceiling (usually a signal to exit), that ceiling adds more speculation than ever before.

Stage 1: When it breaks its ATH ($0.80): "DOGE hits ATH" => "Could it flip ETH?"

Stage 2: When it Beats ETH ($2.72): "DOGE flips ETH" => "Could it flip BTC?"

Stage 3: When it reaches ($10): "Wait a Second, could DOGE become the Reserve Currency?...WTF?!"

Those prices are imperfect, but right now, BTC pumping and political activity are automatically pumping DOGE prices right now. I'm not sure if people have really caught on to this as they are still focused so much on the changing US political scene.

Assuming a 10% growth rate and concomitant 40% growth rate in DOGE could eclipse BTC this bullpen at about $46. $300-400k for BTC is not out of question on this bullrun cycle. I could also see jokes of DOGE hitting $69 and this occurring around April 20, 2025 ("4/20" for those who don't get it").

As DOGE goes through each stage, I could see its drama actually accelerating faster than 40%.

Imagine being Blackrock, who just launched a BTC and ETH ETFs patiently planning a giant scheme/cook only for the meta to change with Trump and Elon teaming last minute...

Imagine being every other country that can move a little quicker and frontrun the US in the EASIEST move of the century, only to miss this blind spot. There's no way for a serious fund to justify blowing $1B on DOGE.

Anyone could justify ETH but it moved from Proof of Work to Proof of Stake for utility and speed over scarcity. ETH isn't a reserve asset anymore...it's utilitarian. It is completely disrupted in this new meta.

But if DOGE gets close enough and manages to have a steady floor, it could find itself in the mix as a US reserve currency (Maybe DOGE to $1000?). The FOMO of institutional funds and other governments conceding to Trump/Musk's sense of humor will trigger massive activity here.

Conclusion

I wouldn't recommend betting the house on DOGE, but it is worth exploring these ironic possibilities that tend to happen more often than not. I'm personally betting a healthy portion of my crypto portfolio on DOGE as part of my thesis.

If I'm wrong, so what? I lost a little bit of money.

If I'm right, I'm not looking forward to picking my exit points...

Wen Lambo?