Author: Hashkey Jeffrey
The 2024 US presidential election is about to usher in the "final battle". Who will enter the White House? Will it be Harris, the first female president to make history, or Trump, who will make a comeback? The outcome is unpredictable.
It is worth noting that cryptocurrency has quietly become the "new battlefield" of this election. Trump's remarks frequently affect the price fluctuations of Bitcoin, and Musk, who has a deep connection with Dogecoin, also supports Trump's campaign. Bitcoin and the virtual asset market seem to be tied to the same chariot with this "political and business alliance". Today, the price of Bitcoin fluctuates around $70,000. Can Trump's election situation become the "starting gun" for Bitcoin to break through?
Currently, the market has begun to bet on Trump's victory in advance, and this expectation has already shown signs in many fields. The U.S. stock, U.S. bond, precious metals and cryptocurrency markets have all shown obvious "Trump market" characteristics. In the past month, the trend of Bitcoin has been highly synchronized with Trump's chances of winning the election. Next, the election situation in the seven swing states will become a key factor influencing the market.
From Wall Street to Silicon Valley, from traditional finance to digital currencies, traders are deploying their investment strategies based on this expectation. However, political elections are always full of variables, and any "surprises" may cause drastic market fluctuations. Investors need to plan ahead and be prepared for various possible situations.
If Trump wins the election, the traditional financial market may have the following impacts:
1. Monetary policy: Trump is expected to maintain a relatively loose monetary environment. This policy orientation will be beneficial to risky assets such as US stocks, especially the industrial and traditional energy sectors; at the same time, US bond yields will also show an upward trend.
2. Tax policy: The Trump administration plans to reduce domestic corporate tax rates while increasing foreign tariffs. This industrialization policy trend will benefit the prices of energy commodities consumed by industry, such as copper and oil, and will also benefit the development of technology companies.
3. International relations: Trump promised to end the Russian-Ukrainian war within days of taking office, but said he would continue to invest in the Middle East. These foreign policy adjustments may affect the trend of military stocks, but overall will bring a more stable environment to the market.
If Trump wins the election, the digital currency market will have the following impacts:
1. Bitcoin is expected to lead the breakthrough: Bitcoin is deeply tied to Trump's image, and Trump has previously expressed support for Bitcoin many times, such as promising to include it in the national reserve and replace the current SEC Chairman Gary Gensler, which are expected to be gradually realized after he takes office. Considering that Trump has always been known for "fulfilling his campaign promises", Bitcoin is expected to take the lead in breaking new highs.
2. Dogecoin may have an opportunity: Musk, Trump’s political and business ally, has always had a deep connection with Dogecoin. It is expected that he will take advantage of Trump’s victory to help Dogecoin (DOGE) return to the market.
3. WLF may drive the DeFi ecosystem: WLF (World Liberty Financial), supported by the Trump family, is likely to take this opportunity to become a new focus of the market. This will not only bring opportunities for WLF to rise, but is also expected to drive the prosperity of the entire DeFi ecosystem, thereby driving up the price of Ethereum (ETH).
Although Trump is likely to win the election, the occurrence of "special" events during the election process cannot be ignored. According to the latest data from PolyMarket, Trump's approval rating is 56.2%, down from last week's high of 65%. The election is still in a stalemate. If Harris wins the election, market expectations will be broken, leading to a sharp reversal.
If Harris wins the election, the traditional financial market may have the following impacts:
1. Tax policy: Harris advocates raising taxes on the rich and large companies, and plans to increase the corporate income tax rate from 21% to 35%, and raise funds for the fiscal revenue by levying taxes on financial transactions. These policies may affect the overall profitability of companies, but will benefit the fiscal benefit areas.
2. Fiscal expenditure: Supporting the universal health insurance plan, expanding social welfare expenditure, and promoting the development of the "care economy" will drive related sectors such as health care and social services. At the same time, a $10 trillion climate plan will be proposed, which will significantly benefit the new energy industry.
3. Overall market trend: After market expectations are broken, the stock market may experience significant fluctuations. Before the new government policies gradually become clear and investors readjust their expectations, the market needs time to find a new direction.
If Harris wins the election, the digital currency market will have the following impacts:
1. Regulatory situation: The Harris administration is likely to continue the strong regulatory approach of the Biden administration. The SEC's regulatory policy is likely to maintain a tough stance, and the overall enforcement efforts are expected to remain unchanged, which will affect the institutionalization process of cryptocurrencies.
2. Market trend: Since the current market has already priced in Trump's victory, if expectations are not met, Bitcoin may face a significant correction. According to Bernstein's forecast, it may fall by 10% by the end of the year. The market needs to establish a new valuation logic.
3. Delaying institutional entry: Harris’ attitude towards cryptocurrencies is rather vague. Although he expressed support for the development of digital assets to maintain U.S. competitiveness, he lacked specific policy details. This uncertainty may affect investor confidence and delay institutional entry.
Once Trump is successfully elected president and successfully enters the White House, how will the crypto market develop in 2025?
1. Positive: Favorable policies for the digital currency market will be gradually implemented, including incorporating cryptocurrencies into reserve assets, restructuring the SEC management structure, and formulating sound regulatory policies. The gradual realization of these positive factors will drive the market to continue to rise until it reaches a temporary peak.
2. Negative news: As the effects of short-term financial stimulus policies gradually weaken, the US economy may fall into recession and stagflation. In this case, market funds will chase the asset class with the largest increase, the strongest liquidity, the most susceptible to market sentiment, but the lowest actual application value - Bitcoin.
3. Negative factors: If other black swan events occur during Trump's administration or in the United States, the digital currency market may experience a cliff-like decline. It is risky to over-bind the development prospects of Bitcoin to a specific person. Although it may benefit in the short term, it will inevitably be painful to get rid of this influence.
The US presidential election is in full swing, and every statement made by the two candidates affects the nerves of the market. Regardless of the outcome, investors need to keep a clear head, pay attention to the progress of policy implementation and changes in market expectations, reasonably seize opportunities while doing a good job of risk control, and avoid being overly affected by short-term market sentiment.
