The 2024 U.S. Election is Approaching the "Final Battle": Who Will Enter the White House?

Will it be the historic first female president, Harris, or the returning Trump? The arrow is on the string, and the outcome is uncertain.

It is noteworthy that cryptocurrency has quietly become the "new battlefield" of this election. Trump's remarks frequently influence Bitcoin price fluctuations, while Musk, who has deep ties with Dogecoin, also supports Trump's campaign. The Bitcoin and virtual asset market seems to be bound to this "political-business alliance." Currently, Bitcoin's price fluctuates around $70,000, and will Trump's election prospects become the "starting gun" for Bitcoin's breakout?

At present, the market has begun to bet on Trump's victory in advance, and this expectation has shown signs in various fields. The U.S. stock market, U.S. bonds, precious metals, and cryptocurrency markets all exhibit distinct characteristics of a "Trump market." In the past month, Bitcoin's trend has shown a high degree of synchronization with Trump's election odds. Moving forward, the electoral trends in the seven swing states will become key factors influencing the market.

From Wall Street to Silicon Valley, from traditional finance to digital currency, traders are deploying their investment strategies based on this expectation. However, political elections are always full of variables, and any "unexpected" event could lead to significant market fluctuations. Investors need to prepare for various possible scenarios.

If Trump Wins, the Traditional Financial Market May Experience the Following Impacts:

1. Monetary Policy: It is expected that Trump will maintain a relatively loose monetary environment. This policy direction will benefit risk assets like U.S. stocks, especially the industrial and traditional energy sectors; at the same time, U.S. bond yields are likely to trend upward.
2. Tax Policy: The Trump administration plans to lower domestic corporate tax rates while increasing tariffs on foreign goods. This industrial policy inclination will benefit the prices of industrial commodities like copper and oil; it will also be favorable for the development of technology companies.
3. International Relations: Trump has promised to end the Russia-Ukraine war within days of taking office, but he has indicated that he will continue to invest in the Middle East. These adjustments in foreign policy may affect military stocks but will overall create a more stable environment for the market.

If Trump Wins, the Digital Currency Market May Experience the Following Impacts:

1. Bitcoin Expected to Lead a Breakthrough: As Bitcoin is deeply associated with Trump's image, and given Trump's previous statements supporting Bitcoin—such as promising to include it in national reserves and replacing the current SEC chairman Gary Gensler—these proposals are expected to be gradually realized after he takes office. Considering Trump is known for "keeping campaign promises," Bitcoin is likely to lead a breakthrough to new highs.
2. Dogecoin May Seize Opportunities: Trump's political-business ally Musk has always had deep ties with Dogecoin, and it is expected that he will leverage Trump's victory to help Dogecoin (DOGE) regain market attention.
3. WLF May Drive the DeFi Ecosystem: The WLF (World Liberty Financial), supported by the Trump family, is likely to become a new market focus due to this opportunity. This will not only provide an upward opportunity for WLF but is also expected to promote the prosperity of the entire DeFi ecosystem, thereby driving up the price of Ethereum (ETH).

Although the probability of Trump's victory is currently high, the occurrence of "special" events during the election process cannot be ignored. According to the latest data from PolyMarket, Trump's support rate is 56.2%, down from last week's peak of 65%. The election situation remains tense, and if Harris ultimately wins, market expectations will be shattered, leading to a significant reversal.

If Harris Wins, the Traditional Financial Market May Experience the Following Impacts:

1. Tax Policy: Harris advocates for increasing taxes on the wealthy and large corporations, planning to raise the corporate tax rate from 21% to 35%, and raising funds for the treasury through taxes on financial transactions. These policies may impact overall corporate profitability but will benefit sectors that gain from fiscal spending.
2. Fiscal Spending: Supporting a universal healthcare plan, expanding social welfare spending, and promoting the development of the "care economy," these policies will drive related sectors such as healthcare and social services. Additionally, proposing a $10 trillion climate plan will significantly benefit the renewable energy industry.
3. Overall Market Direction: After market expectations are shattered, the stock market may experience significant fluctuations. Before the new government's policies become clearer and investors readjust their expectations, the market will need time to find a new direction.

If Harris Wins, the Digital Currency Market May Experience the Following Impacts:

1. Regulatory Landscape: The Harris administration may continue the Biden administration's strong regulatory approach. The SEC's regulatory policies may maintain a tough stance, and overall enforcement is expected to remain strong, which will affect the institutionalization process of cryptocurrencies.
2. Market Direction: Since the current market has already priced in Trump's victory, if this expectation fails, Bitcoin may face a significant correction. Bernstein predicts a potential 10% decline by the end of the year. The market needs to establish a new valuation logic.
3. Delay in Institutional Entry: Harris's stance on cryptocurrencies is somewhat ambiguous; although she expresses support for the development of digital assets to maintain U.S. competitiveness, she lacks specific policy details. This uncertainty may affect investor confidence and delay the pace of institutional entry.

If Trump Successfully Becomes President and Enters the White House, How Will the Crypto Market Develop in 2025?

1. Positive: Favorable policies for the digital currency market will gradually be implemented, including incorporating cryptocurrencies into reserve assets, restructuring the SEC's management framework, and formulating comprehensive regulatory policies. The gradual realization of these favorable factors will drive the market higher until it reaches a peak.
2. Negative: As the effects of short-term financial stimulus policies gradually weaken, the U.S. economy may fall into recession and stagflation. In this scenario, market funds will chase the largest gains, the most liquid assets, which are most susceptible to market sentiment but have the lowest actual application value—Bitcoin.
3. Negative: If other black swan events occur during Trump's presidency or in the U.S., the digital currency market may face a cliff-like decline. Overly binding Bitcoin's development prospects to a specific individual is risky; while it may yield short-term benefits, breaking free from this influence will inevitably involve growing pains.

The U.S. election battle is in full swing, and every statement from the two candidates stirs the market's nerves. Regardless of the outcome, investors need to maintain a clear mind, pay attention to the progress of policy implementation and changes in market expectations, seize opportunities while managing risks, and avoid being overly influenced by short-term market sentiment.