Political and fiscal strategy impact (macro aspect)
Government's massive deficit and fiscal policy structure
Musk opposes the 'Too Big to Fail' bill passed by Trump (which increases the deficit by about $3.3 trillion), and the formal establishment of the 'American Party' marks a direct challenge from the Chinese-funded camp to the existing bipartisan fiscal policies.
If the 'American Party' gains prominence, its fiscal concepts (emphasizing deficit control and fiscal conservatism) may pressure future legislation to tilt towards market-friendly policies.
Friendly terms for cryptocurrency negotiations
Analysis points out that the 'Too Big to Fail' bill attempted to include clauses like 'stablecoin taxation' and 'crypto tax reform', allowing the crypto ecosystem to gain entry in the bill, but also facing rising pressure on taxation and regulation.
If Musk's 'American Party' emphasizes 'deregulation' and 'decentralization' concepts, it is expected to promote more favorable cryptocurrency policies, such as tax cuts and relaxed regulations.
Market sentiment and risk asset transmission (macro + fundamentals)
Market risk aversion rises
Musk's political maneuvers trigger uncertainty, which may temporarily exacerbate the 'policy turbulence' sentiment regarding cryptocurrency assets, leading investors to reduce holdings or adopt a wait-and-see approach.
Especially for price-sensitive assets like stablecoins and altcoins, a pullback may occur first.
Policy beneficial opportunities window
If the 'American Party' continues to lean towards loosening regulations on cryptocurrency, future legislative adjustments may be expedited, such as delays in restrictive clauses and relaxed regulatory thresholds, which could constitute a medium-term benefit.
Fundamental structure: public support and strength allocation
First point: public support anchors hot topics
Polls on platform X show about 1.24 million participants, with 65.4% supporting the establishment of a new party.
The 'American Party' targets the 'middle 80%' of American voters, a group that has traditionally been friendly to innovation and has a higher tolerance for cryptocurrency.
Second point: strategy focuses on seat competition
Musk's strategy is not to expand nationwide but to focus investments on 2–3 Senate seats and 8–10 House seats.
Such precise layouts can become 'key deciding votes' in policy disputes, vying for control over blockchain and cryptocurrency legislation.
Key impact pathways for cryptocurrency
Explanation of expected impact path direction
The tendency to loosen regulatory environments may support the 'American Party's' advocacy for deregulation, potentially promoting a favorable environment for cryptocurrency assets.
If tax design leads to tax cuts or delays that impact key seats, it can alleviate pressure on cryptocurrency tax policies.
Market liquidity short-term fluctuations; medium-term rebound expectations may initially bring uncertainty in policies, but long-term favorable policies, if implemented, could stimulate capital inflows.
Investor sentiment diverges, increasing short-term panic sell-off risks, but potential dividends attract long-term mainline attention.
The establishment of the 'American Party' by Musk may have the following impacts on Bitcoin (BTC) in the short and medium term, which we can analyze from three aspects: market sentiment, policy expectations, and capital flows:
Short-term impact: emotional uncertainty + policy speculation
As for the positive aspects
Increased expectations for cryptocurrency friendliness: Musk has long been a proponent of cryptocurrencies (supporting BTC and DOGE); his formation of a new party may signify a more open cryptocurrency policy concept.
Speculative sentiment heats up: political news combined with Musk's popularity may prompt large funds to exploit the situation, triggering a short-term speculative frenzy.
Negative impact:
Increased political uncertainty: the market remains skeptical about whether the 'American Party' can truly influence Congressional policies, which easily leads to high volatility.
Enhanced macro risk aversion demand: if the 'American Party' leads to further division in U.S. politics, it may trigger a pullback in traditional market risk assets, with cryptocurrencies showing short-term correlation declines.
2. Medium to long-term impact: policy direction + tax environment
Bullish path: expectations for policy loosening strengthen
If the 'American Party' becomes a key minor party in Congress, it may delay or block strong regulatory legislation, such as IRS tax guidelines and SEC definitions.
Promote positive progress in 'legalization of stablecoins' and 'regulation of on-chain finance'.
Cryptocurrency asset tax optimization
Musk has repeatedly criticized 'high capital gains tax' policies; if the new party gains control over fiscal issues, it may promote a more lenient tax system for investors holding cryptocurrency.
Improvement in retail investor environment
Reduce institutional friction such as trading KYC restrictions for individual users and on-chain wallet reviews.
Potential risks:
Musk's personal influence is significant, but the party structure is unstable. If the 'American Party' collapses midway, it may lead to disappointment in the market, triggering a pullback.