Trump returns to the White House! The golden age of encryption is coming, but will 2 major policies cause a huge economic shakeup?

On the early morning of November 6 local time, 78-year-old Trump defeated Democratic candidate Hillary in a crushing victory, becoming the 47th President of the United States.

The financial market has responded enthusiastically to this news, and the 'Trump trade' continues to be in full swing. On the day of the election, the three major U.S. stock indexes and Bitcoin reached historic highs, and the cryptocurrency market cap broke through $2.6 trillion, while the U.S. dollar index rose to a near four-month high of 105.

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Trump's overwhelming victory comes at a critical Node in American politics and the global economy, and the next four years will be filled with uncertainty and challenges, with profound and complex implications for various industries.

"The golden age of encryption"

On the positive side, the encryption industry pro's 'real deal' has not been watered down. Trump has promised to make the United States the 'global capital of Cryptocurrency' and will never sell the BTC held by the government now or in the future.

Trump also positions himself as a candidate supporting Crypto Assets, vowing to end the so-called 'persecution' of the industry and ensure the United States enacts more Crypto Assets-friendly legislation.

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Crypto.com CEO Kris Marszalek said, "The future of cryptocurrency has never been as bright as it is today."

Bitwise's Chief Investment Officer Matthew Hougan said in a memo on November 6th that Trump's victory in the US presidential election will catalyze a "Golden Age of Cryptocurrency" as the new government will improve the regulatory environment.

Over the past four years, the encryption industry has been in a bind. Given Trump's friendly attitude towards the Cryptocurrency industry during the election, the new government is expected to provide support, such as changing the leadership of the SEC and terminating 'Operation Chokepoint 2.0'.

If these verbal supports can be implemented smoothly, the encryption industry will usher in a regulatory spring and a frenzy of institutional investment. By then, the industry will be more regulated and innovation will be more flourishing, and cryptocurrency is expected to truly integrate into the global financial system.

Tariff butterfly effect, global industrial chain 'earthquake'

Trump has stated that if re-elected, he will significantly increase the import tariffs on foreign goods entering the United States. For example, imposing tariffs as high as 20% on foreign goods, 60% on imported Chinese products, and even 200% on certain imported cars.

High tariffs will directly lead to a decrease in the import quantity, and some economists warn that Trump's trade protection proposals will have an "impact" on countries around the world, including the eurozone and the UK.

Ahmet Kaya, Chief Economist at the National Institute of Economic and Social Research (Niesr), said that the UK could be one of the "most severely affected countries" under such plans, with the UK's economic growth rate expected to slow from the predicted 1.2% to 0.4% by 2025.

UK Chancellor of the Exchequer Rachel Jane Reeves said that the UK will strongly express the necessity of free and open global trade to Trump. She said, 'The US also benefits from free and open trade with us and other countries around the world, and benefiting from this open trade allows us to achieve a win-win situation.'

Tariffs are an important tool of trade protectionism. Although they may bring some benefits in the short term, they often backfire in the long run. If Trump hopes to stimulate the US economy through trade protectionism, not only will low-income countries find it even more difficult to use export trade as a growth point, but the burden of the growing tariffs will likely be borne by US consumers in the end.

Inflation 'stubborn' worsens

The defeat of the Democratic Party this time is actually a long-standing response to the grievances of the American people. In recent years, the soaring prices and housing prices in the United States, the shrinking wallets and savings, have made middle-class and low-income voters dissatisfied. Voters have gradually lost trust in government officials, so-called liberal elites, and left-wing media, which has had a serious negative impact on the Democratic Party. Trump vowed to 'Make America Affordable Again,' which became one of his winning cards.

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However, investors are betting that Trump's tax cuts and tariff increases will push up inflation and slow down the pace of interest rate cuts.

Andrzej Skiba, Head of US Fixed Income at BlueBay, the global asset management arm of Royal Bank of Canada, said, 'If Trump imposes a 10% tariff on all global partners, it's a big deal, as it could potentially lead to a 1% rise in inflation. If inflation rises by 1% next year, we may say goodbye to rate cuts.'

Esho Capital founder Peter Esho said, "The market is struggling to figure out what's next, but for now, it's digesting the prospect of higher growth and higher inflation."

A significant reason for the continuous record highs in the US stock market this year is the expectation of the Fed's imminent interest rate cut, as inflation is falling back to the target level of 2%. CME fedwatch data shows that the Fed will announce the latest Interest Rate decision on Thursday, and the market still expects the Fed to cut interest rates. However, traders have already dropped their expectations for the number of interest rate cuts by the Fed next year.

"Large-scale expulsion of illegal immigrants"

In recent years, American society has become increasingly divided, and the expulsion of illegal immigrants has become an issue that some populists often use. They believe that illegal immigrants have taken away jobs from locals, increased crime rates, and added to the social burden, successfully diverting public attention from deep-seated issues such as economic inequality and social injustice, and instead directing it towards vulnerable groups.

The policy of expelling illegal immigrants will further exacerbate social divisions and intensify conflicts between different ethnic groups and social classes.

Trump promised that one of the first actions he would take after taking office is to carry out the large-scale expulsion of millions of illegal immigrants, but this is not an easy task. Although the president has specific powers on immigration issues, carrying out large-scale deportations faces considerable challenges at the operational level.

The U.S. Immigration and Customs Enforcement and other organizations estimate that Trump's deportation plan will cost billions of dollars. If industries such as construction, hotels, and agriculture lose a large number of workers, it could also have a huge impact on the economy. In addition, there are resource challenges as well. The U.S. Immigration and Customs Enforcement must choose where to concentrate its limited resources.

In short, time will tell whether Trump can launch "MAGA" 2.0.

[Disclaimer] The market carries risks, and investments should be made cautiously. This article does not constitute investment advice. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. It is your own responsibility to invest based on this information.

This article is authorized to be reprinted from: "Foresight News"

Original author: BitpushNews