One, Event background: Musk's establishment of the 'American Party' as a political game
On July 5 local time, Elon Musk officially announced the establishment of the 'American Party' on social media X, claiming this move will 'return freedom to you'. This declaration is a response to an online poll initiated on July 4—of 1.249 million voters, 65.4% supported breaking the monopoly of the Democratic and Republican parties to establish a new party representing the '80% middle class'. This move marks Musk's complete break with Trump, directly triggered by Trump's signing of the (Great and Beautiful Act) that day. The bill, due to the cancellation of electric vehicle tax credits and an additional $3.8 trillion deficit, was denounced by Musk as 'mad spending' and 'strategic bankruptcy', with JPMorgan estimating it would lead to a $1.2 billion annual loss in Tesla profits.
Two, Triple impact on the cryptocurrency market
1. Short-term meme coin speculation frenzy
- Concept coins soar: The 'American Party' concept token AP (America Party) based on Solana skyrocketed 150% in market cap within 24 hours, surpassing $10 million, topping the DexScreener hot list. Meanwhile, red, white, and blue-themed MEME coins (such as KBBB) emerged, but most rapidly collapsed after a 30% surge, demonstrating high volatility risks.
- Trump-associated tokens under pressure: Trump-related MEME coins (such as TRUMP, MAGA) fell nearly 10% due to political opposition, creating a value divergence with his family's $12 million crypto assets.
2. Regulatory risk escalation
- Legitimacy disputes over celebrity tokens: Regulatory agencies may strengthen scrutiny over tokens endorsed by political figures. The SEC has previously fined Musk for manipulating Dogecoin with tweets, while Trump's promotion of the TRUMP coin on Truth Social is suspected of undisclosed conflicts of interest.
- Legislative gaming intensifies: The Democratic Party seizes the opportunity to promote the (Digital Assets Anti-Money Laundering Act), demanding strict control over anonymous political tokens; the Republican Party accelerates the promotion of pro-crypto (Market Structure Act), but the tug-of-war between the two parties may become more complex due to the involvement of the new party.
3. Long-term market structure reshaping
If the 'American Party' secures key seats in the 2026 midterm elections (targeting 2-3 Senate seats and 8-10 House seats), it may drive a policy shift:
- Positive sectors: Supporting Bitcoin's inclusion in national strategic reserves (echoing Trump's policy but more radical), relaxing DeFi innovation restrictions, promoting AI-driven government efficiency tokens.
- Negative sectors: Suppressing fossil fuel-linked tokens (against traditional oil lobbying), strict control over political fundraising MEME coins.
Three, Macro-economic impact pathways
1. Intensified competition between energy and technology industries
The bill's cancellation of electric vehicle subsidies severely impacts Tesla, while also cutting solar energy investments, potentially causing the U.S. to lose 500 gigawatts of clean energy capacity and millions of jobs. Musk leverages the 'American Party' to unite Silicon Valley capital to pressure traditional energy groups, potentially upending Trump's industrial alliance.
2. Shift of fiscal policy risks
Musk criticizes the bill saying '90% of the tax cut benefits go to the 1% rich', exacerbating wealth disparity. If the 'American Party' implements the 'Third Way' agenda—fiscal conservatism (deficit reduction) combined with future industry investments (space, AI, blockchain)—it may attract moderate members from both parties, forcing the Republican Party to adjust its tax reform plan, possibly even triggering an early debt ceiling crisis.
3. Reconstruction of the political economy landscape
- Capital power becoming overt: Musk injected $400 billion of personal assets into the party, breaking traditional political donation limits and setting a precedent for 'wealthy direct control'. He uses the X platform's algorithms to precisely push campaign information, potentially disrupting voter mobilization models.
- Battle for crypto voters: 50 million crypto holders in the U.S. become a key voting bloc. Trump had promised to 'pardon the Silk Road founder' to attract this group, while Musk, leveraging his appeal in the Web3 space, may siphon off emerging Republican voters.
Four, Outlook simulations: Three scenarios and market signals
1. Flash in the pan (probability 40%): If the 'American Party' does not gain seats in the 2026 midterm elections, it may devolve into an online movement, the meme coin bubble may burst, and traditional bipartisan crypto policies may continue along current paths.
2. Key minority (probability 50%): Winning 5-10 seats to become the 'kingmaker', pushing pro-crypto legislation (such as clarifying token commodity attributes), leading to a rebound in tech stocks like Tesla and Bitcoin hitting $150,000.
3. System reconstruction (probability 10%): Nominating a presidential candidate in 2028 and receiving more than 5% of the votes would trigger federal party certification, promoting the Treasury to purchase Bitcoin reserves and issue a national stablecoin, fundamentally rewriting the financial order.
Note: Legally, the 'American Party' needs to convene a representative assembly to elect interim officials and declare its name, and it is currently unconfirmed whether this has begun. However, Musk has already leveraged the 220 million users of the X platform and public opinion polls to build momentum, embedding political fantasies into reality. Cryptocurrency, as a core carrier of his 'technological empowerment' concept, is destined to become a barometer and chip in this experiment.