What impact does Musk's establishment of the "American Party" have on the crypto market?

Musk has publicly criticized the U.S. SEC's "overregulation" of encryption multiple times, advocating for "21st-century rules to govern 21st-century technology." If the "American Party" gains key seats in the 2026 midterm elections, it may promote the following policies:
Simplify compliance processes: for example, allow banks to directly custody encryption, reducing the entry barriers for institutions.
Clarify the legal status of stablecoins: Continue the framework of the "Stablecoin Innovation Act" from the Trump administration, promoting banks to issue compliant stablecoins.
Exemption from small transaction tax: Referencing Republican Senator Cynthia Lummis's proposal to exempt crypto transactions under $300 from tax, reducing user participation costs.
The "American Party" advocates for reducing government spending and debt, but Trump's "Big and Beautiful" plan may still expand the deficit (spending $3.3 trillion), increasing market concerns about the credit of the dollar. Historical experience shows that such policies drive funds towards decentralized assets like Bitcoin. For example:
After Trump's victory in 2024, Bitcoin soared from $50,000 to $77,000 within a week.
If the "American Party" strengthens its image of fiscal tightening, it may further consolidate Bitcoin's "safe-haven attributes."
The news of Musk announcing the establishment of a party has directly sparked attention in the crypto market, with Bitcoin experiencing a single-day fluctuation of over 5% on July 5, and trading volume surging by 40%.
If regulatory easing is implemented, institutions like Grayscale may accelerate the approval of Bitcoin ETFs and other products. Referring to the activation effect of the Ethereum ETF, altcoins like SOL and DOGE may benefit.
If Tesla and SpaceX, both owned by Musk, allocate part of their cash flow to encryption currencies (such as Bitcoin), it will create a demonstration effect. Previously, Tesla purchased $1.5 billion worth of Bitcoin in 2021, which led to a surge in coin prices.
Musk's control over the X platform (formerly Twitter) may make it a testing ground for Web3 social experiments, such as integrating NFTs or DAO governance.
2026 Midterm Election Results: If the "American Party" wins 2-3 Senate seats, it could significantly advance encryption-friendly legislation.
Federal Reserve Monetary Policy: If the "American Party" expands the deficit leading to a rebound in inflation, it may accelerate rate cut expectations, which would be beneficial for risk assets (including encryption currencies).
Elon Musk's personal actions: for example, whether to increase his holdings in Bitcoin, promote Tesla to accept encryption payments, etc.
Elon Musk's establishment of the "American Party" may boost the crypto market in the short term through policy expectations and emotional speculation, but the long-term impact depends on the new party's actual policy implementation capabilities. If it successfully promotes regulatory loosening and fiscal reform, cryptocurrencies could become the "beneficiaries" of political and economic changes in the United States; conversely, if it falls into the quagmire of bipartisan struggles, the market may return to being driven by technical factors. Friends need to closely monitor the dynamics of the 2026 elections and the policy adjustments of regulatory agencies like the SEC.