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Let Slip the Doges of War
Crypto is in the government's crosshairs—read why Doge will win
Last week, the US government’s war against crypto burst out into the open with two high-profile lawsuits.
Despite all the fireworks, Dogecoin has escaped largely unscathed.
Let’s take a look at how crypto is in the crosshairs, and why the best response may be to let slip the Doges of war.
Crypto is under attack—from the US government.
Just in the last week, the SEC filed lawsuits against two of the biggest crypto companies in the world: Binance and Coinbase.
Combined, the two exchanges serve a 150 million customers and are worth over $25B. Now, both are facing charges of selling unregistered securities.
The lawsuits represent a major escalation in the federal government’s war on crypto.
At the beginning of 2023, government agencies seemed to attack crypto indirectly by taking action against banks who served crypto clients.
On Twitter, this was dubbed “Operation Chokepoint 2.0” to describe the way agencies mobilized in synchronized fashion to snuff out funding for the industry.
However, because the government never acknowledged what they were doing to the public, Chokepoint 2.0 was seen by many as just another another Internet conspiracy.
The feds’ latest actions make it harder to deny that they have crypto in the crosshairs.
Recent language from public officials reflects this increased hostility. Last week, SEC Chair Gary Gensler characterized the crypto industry as “hucksters, fraudsters, scam artists, ponzi schemes.” During debt ceiling negotiations, President Biden said, “I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders.”
The US government can’t kill crypto, but its crusade will push the industry offshore. Just as it’s doing so, America’s geopolitical adversaries have begun to embrace digital assets.
In April, Russia became the second-largest Bitcoin mining country, in part because it offers tax incentives for miners. Its largest bank, Sberbank, is set to begin offering crypto trading services to customers this month.
Two weeks ago, Hong Kong launched a new regulatory regime that is friendly to digital asset companies in a bid to become crypto trading hub in the east.
Mainland Chinese citizens will reportedly be able to use the island’s services to invest in crypto. Just two days ago, Hong Kong politician Johnny Ng publicly invited Coinbase to establish operations in Hong Kong.
The Middle East is another region welcoming crypto with open arms. American companies Ripple and Gemini both set up headquarters in Dubai, and the UAE’s central bank is working with Hong Kong to develop international crypto regulations.
Even the UK is getting in on the action: the crypto-focused VC firm Andreessen Horowitz is opening a new base in London.
It’s ironic that many nations viewed as ‘authoritarian’ are becoming more friendly to a freedom-promoting technology than America, the land of the free and the place where crypto started.
The reason is that dollar sanctions are one of the US’s most powerful weapons for imposing its geopolitical will on other countries.
As long as the world runs on a dollar standard, America has a reason to resist an alternative monetary system, no matter how superior its technology.
The crackdown on crypto can also be understood as an extension of the growing censorship-industrial complex in America.
Elon has often argued that money is best understood as a form of information.
Given the government’s increased role in policing what information people can share on the Internet, it’s logical they would also seek to control the flow of digital cash, i.e. high-value censorship-resistant information.
This is especially true because crypto is a form of money favored by political independents, government skeptics, and outright dissidents, all of whom benefit from an alternative financial system that isn’t controlled by big brother.
The best example of this was during 2022’s Canadian Freedom Convoy, when the Trudeau administration imposed financial penalties on both protestors of vaccine mandates and their donors.
When the truckers circumvented the sanctions with crypto, the Canadian government sought to freeze that money too.
The final turn of the screw for financial censorship is government-controlled digital cash—also known as a CBDC—which would allow the feds to monitor and control all transactions.
Over 100 countries are already experimenting with CBDCs. Next month, the US will roll out of its FedNow digital payment service for banks, widely seen as a stalking horse for a centrally controlled digital dollar.
So if the government is going after crypto, you might be wondering how long until the bad guys target Dogecoin?
First is Dogecoin’s status as a joke.
Censorship is an indication of weakness, not strength. Tyrants who censor humor reveal themselves to be brittle and insecure.
Banning meme money would be the ultimate self-own, revealing that the most powerful country in the world is afraid of the coin with the yellow dog.
Censorship of Doge would unleash the mother of all Streisand effects—if the feds really try to take it down, it could go viral like never before.
Another layer of insulation is Doge’s immaculate conception, which helps it avoid being deemed a security that can be regulated by the Securities Exchange Commission.
Doge never had any intention of being profitable—it was created to make fun of crypto scams.
Its founders got rid of their coins early on (in Billy’s case netting no more than the price of a used Honda Civic) and Dogecoin traded at less than a penny for most of its existence.
Since then, the Doge community has persisted, bound not by shared expectation of riches, but love of dogs and memes.
By contrast, many of the tokens named by the SEC in complaints against Coinbase and Binance were created by small groups of insiders who sold to retail for significant gain.
In other words, it’s tough to make the argument that Doge is another high-profile crypto grift. Its comic creation and historical unprofitability negates the government’s preferred vectors of attack.
Bitcoin is another cryptocurrency with an immaculate conception, part of the reason the SEC hasn’t gone after it.
When news of the Coinbase lawsuit broke, prominent Bitcoiner Jack Dorsey opined that the company should refocus on Bitcoin, whose creation myth is a similar to Dogecoin’s.
Elon took the opportunity to amplify his support for Doge, tweeting, “Doge ftw” [for the win].
The federal government has proven itself willing to censor information, humor, and now money.
Its war against crypto has been simmering for a while. Last week, it finally broke into the open.
There is already political pushback: today, a group of congressmen introduced legislation to restructure the SEC and fire Gary Gensler.
But for regular folks, the best way to fight back against the money mafia and their stable of corrupt regulators might be to buy and hold Dogecoin.
The DogeArmy didn’t start the fight, but they will finish it. It’s time to let slip the Doges of war.
Bonus Content: Money as Information
This idea that money is information gets thrown around a lot on Twitter, but it isn’t always clear what this means.
I wanted to highlight a series of tweets looking at money from the perspective of information theory.
The exchange started when AI account Smoke-away posted a ChatGPT-generated paragraph about money as information:
Elon responded to the post with a pithy maxim:
Here’s a Risky response arguing that if money is just data, Dogecoin is a special sort:
Dogey Treats: News Bites
Twitter/X will begin paying creators for ads served in their replies “in a few weeks.” The first block of payments will total $5M.
New Twitter CEO Linda Yaccarino tweeted a thread explaining her mission and vision for Twitter 2.0.
Babylon Bee writer Ashley St Clair joined the Doge Army.
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Disclaimer: This is not financial advice and I am not a financial advisor. The article above references an opinion for entertainment purposes only and it is not investment advice. Always assume that the author of the article is actively trading and that the opinions expressed may be biased towards the author’s holdings. Do your own research and consult with a licensed financial adviser before making any investment decision. Do not treat any opinion expressed in this newsletter as a specific inducement to make a particular investment. Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or cryptocurrency or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, cryptocurrency, or financial product does not guarantee future results or returns. Dogecoin is a speculative and highly volatile asset susceptible to pump-and-dump schemes.
At the time of publication, Dogecoin is around $0.06 per coin.