🚨Musk: If the DOGE Office plan succeeds, Bitcoin prices may be frustrated rather than boost financial markets
Elon Musk recently warned that the new Department of Government Efficiency (DOGE) he is involved in may slow down the price growth of Bitcoin. As an adviser to the new President Donald Trump, Musk leads the White House Counsel Office DOGE (an acronym for his love for Dogecoin and "Department of Government Efficiency"), with the goal of curbing inflation.
Faced with the US national debt dilemma, Musk said "We either solve this problem or we are actually bankrupt." He also affirmed some proposed plans, such as establishing a Department of Government Efficiency (DOGE) to improve government efficiency, reduce excessive spending, and slow the growth of the federal budget deficit to curb inflation.
We know that high deficits usually lead to inflation because increased government spending speeds up the circulation of money, thereby pushing up prices. In addition, the Federal Reserve will also lead to inflation of the dollar and rising prices by creating new dollars and lending them to banks to buy government debt.
In addition, in response to the optimistic bullish sentiment of X users, Musk said that if the dollar inflation is resolved, the price of buying cryptocurrencies with dollars will fall under other conditions being the same. The key now lies in the ratio of dollars to cryptocurrencies.
This effect is particularly significant in the cryptocurrency market and is clearly reflected in the prices of Bitcoin and other major token pools such as ETH, XRP, SOL and DOGE.
Although not all experts believe that Bitcoin can hedge against dollar inflation, the purchasing power of funds held in the form of BTC will increase significantly over any four-year period, while the inflated dollar will lose its purchasing power parity.
In summary, Musk believes that if the DOGE office plan is successfully implemented, it will have an adverse impact on the price of Bitcoin rather than promote the growth of the financial industry. The reason is that lower deficits and inflation rates will slow down the price increases in traditional financial markets (such as stocks) and cryptocurrency markets (such as Bitcoin).
At the same time, the price of Bitcoin has been falling back all the way to the current level of around $93,000 after falling below the $100,000 mark on Tuesday.
