【Disclaimer】This article is for reference only and does not constitute any investment advice. Investment involves risks, please operate with caution. Readers should independently evaluate the content of this article based on their own circumstances and bear the risks and consequences of investment decisions.
On July 13, 2024, a sudden incident that shocked the world occurred. During a campaign rally in Pennsylvania, former US President Trump was shot by a gunman from a rooftop more than 100 meters away. The bullet passed through his right ear and the assassination attempt failed. Such assassination attempts against politicians are not uncommon in American history. Fortunately, Trump was only slightly injured and did not suffer serious injuries. For investors, the focus is on how such sudden political events will affect the financial market. This article will sort out the short-term impact of similar events in history on the market and explore the long-term impact of political turmoil.
The relationship between the assassination of the US president and the risk market
On July 15, the first trading day after Trumps assassination, U.S. stocks rose across the board and closed at a record high. The assassination of politicians often has an unclear relationship with the risk market. In history, a total of ten U.S. presidents have been assassinated, and four of them died. The last assassination of a U.S. president occurred 43 years ago in 1981, and President Reagan survived the assassination. There was also the 35th President John F. Kennedy in 1963, who was the fourth U.S. president to be assassinated.
Such sudden death of a president usually causes short-term and violent fluctuations in the risk market. For example, in September 1955, Eisenhower suffered a heart attack after exercise, causing the stock market to plummet by 6.5% in one day. In November 1963, Kennedy was assassinated, and the US stock market immediately fell by 3% that day. The stock market closed 2 hours in advance to commemorate Kennedy.
But sharp declines are often followed by rapid rebounds. In late October 1963, less than a month after President Kennedy was assassinated, the stock market saw a surge, with the market recovering all its losses in just a few days, with the Dow Jones Industrial Average up 35% for the month. Similarly, the stock market surged after former President Ronald Reagan escaped an assassination attempt in March 1981.
Trumps assassination greatly improves his chances of winning the election
In the video clip shot by Twitter user @C 3 PMeme, Trump can be seen tilting his head to look at the screen while moving closer to the microphone, which saved his life.
Thomas aimed his gun at the center of Trumps head
Trump escaped a bullet by tilting his head to look at the screen
Trumps escape from danger this time has made his supporters believe that he is the chosen one. After the assassination, he shouted Fight Fight Fight three times, which made him look more like a brave warrior fighting for the United States. Trumps heroic image has been fixed. Even many business and social leaders who have always criticized him have expressed their support for him. Musk, who was the first to bear the brunt, sent 6 tweets in a row to support Trump, saying in the tweet that the last time the United States had such a tough president was Theodore Roosevelt a hundred years ago. He also tweeted later: I fully support President Trump and hope he recovers soon.
Similarly, Zuckerberg also expressed his support for Trump. Meta, the parent company of the social media platform Facebook, announced that it would restore Trumps Facebook and Instagram accounts in the coming weeks. Zuckerberg had a deep feud with Trump before, and Trump himself has repeatedly criticized Facebook as the enemy of the people.
According to data from the crypto prediction market Polymarket, Trumps chances of winning the US election in November have risen from 60% before the incident to nearly 70%, setting new records. RCP combined the latest polls from various sources and found that Trumps chances of winning the election were 47.1%, far ahead of Bidens 44.4%. It is expected that the polls will rise further in the future, and Trumps return to the White House is just around the corner.
Polls show Trump leading Biden in election odds, source: RCP
If Trump is able to win the national vote in November, his political ideas will have a long-term impact on the U.S. stock market. As a politician who attaches great importance to the performance of the stock market, Trump will continue to promote policies such as tax cuts, increased tariffs, and border control. Investors need to pay close attention to the impact of these policy changes on the economy and companies, and adjust their investment strategies accordingly. After all, the stock market is likely to continue its high rise after Trump takes office, but it also faces many uncertainties from his policy orientation.
Encouraged crypto market
After two months of decline, Trumps assassination escape became the most direct cause of the rebound. Bitcoin rose from 58,000 to 65,000, which also led to a general rise in the cottage industry. Why did the market rise? In fact, it cannot be attributed entirely to Trump. We can see that the shooting time was Sunday, and the market liquidity was originally poor, which may have continued the rise of the previous working day. The positive CPI data on Thursday has already led traders to strongly bet on the interest rate cut environment, and this positive trend is likely to continue over the weekend. Therefore, the market rise caused by the shooting is not entirely the main factor. At the same time, there are also positive factors such as the German governments completion of the sell-off, the upcoming approval of the Ethereum spot ETF, and the return of funds after the end of the European Cup. Therefore, although Trumps assassination did drive short-term market sentiment, it only triggered the market and was not the main reason for the price increase.
Trumps assassination brought us more emotional excitement and more support from Americans for Trumps presidential election. This incident also deepened the American peoples support for the Republican Party represented by Trump. The Republican Party has always been more friendly to cryptocurrencies, which will bring long-term benefits to the future development of the crypto market. Therefore, the potential impact of the assassination is not limited to short-term market fluctuations, but may deepen the recognition of the Republican Party and its policy propositions at the political level, thus having a long-term and important impact on the long-term direction of the entire crypto industry.
Short-term impact: Stimulate market sentiment and attract crypto investors
Unexpected events increase market volatility. News of assassinations of politicians often triggers market uneasiness. Some traders believe that Trumps chances of winning the election have increased, and the market should strengthen its expected response to a series of fiscal, trade and regulatory policies that may be implemented during Trumps administration. These policies include loose financial regulation, etc., which are expected to improve liquidity and benefit risk markets. It can be seen that Bitcoin broke through the $60,000 mark on July 13, the day Trump was assassinated, and continued to rise. In the subsequent Asian trading session on July 15, gold prices fell, stock index futures changed slightly, the US dollar rose slightly against most currencies, and US Treasury futures fell. These cross-asset class reactions echoed the rapid changes in market sentiment and expectations.
Long-term impact: Pay attention to whether Trump will introduce substantial crypto-friendly policies after his election
During Trumps last term, the Trumpflation led to a surge in US stocks, especially in the technology and financial sectors. As a politician who openly supports cryptocurrencies, Trumps re-election will be very beneficial to the development of the cryptocurrency market. He is likely to take a series of measures such as lowering interest rates, devaluing the dollar, and promoting exports to help small and medium-sized enterprises recover. These will also create a favorable environment for the risk market. It is expected that after the ETH spot ETF is passed, the SOL ETF is also likely to be realized in Trumps new term, and more cryptocurrency ETFs will flourish in the future.
Emerging MEME Tokens
Election-related concept coins have always been a hot topic in the cryptocurrency market. Previously, there have been Trump-related concept tokens such as MAGA, MAGAHAT, and DJT. There is no doubt that the assassination of Trump has drawn the attention of speculators to the chain, which has strongly resonated with the unique emotion-driven characteristics of MEME and ignited a crazy rise in MEME. The influence of political events is penetrating into every corner of the crypto market. The old coin MAGA once rose rapidly by more than 50% after the shooting, and the election concept coin PEOPLE rose by more than 60% within the day. A number of new election concept tokens have also appeared, such as EAR, FIGHT, FEARNOT, etc., which can currently be traded on the XT exchange.
• EAR
The full name of Ear is “The Ear Stays On”, which represents Trump’s injured right ear. The name is borrowed from the slogan of Trump’s dog “The Hat Stays On”. The market value has reached 30 million US dollars at its peak. As the heat of the shooting incident has passed, the market value has dropped significantly and is currently around 1.5 million.
CA:2BUZ19fT8TYvPzhuvtCCp9ceu9eNRCmY11S4vSATpump
• FIGHT
After being injured, Trump raised his fist and said Fight! three times in a row to his supporters. Photos and videos of Trump shaking his fist and shouting Fight almost dominated social media. Fight exists on the ETH and SOL chains, with current market capitalizations of 55 million and 5 million US dollars respectively. Fight on the SOL chain has increased 10 times in 2 days since its initial listing on the XT exchange.
CA(ETH):0x8802269d1283cdb2a5a329649e5cb4cdcee91ab6
CA(SOL):KMnDBXcPXoz6oMJW5XG4tXdwSWpmWEP2RQM1Uujpump
• FEARNOT
Trump stressed FEAR NOT in a post the day after the assassination, and later added the words Fear Not to a photo of his campaign website. This boosted the sentiment of MEME traders, and the market value, like EAR, once exceeded 30 million US dollars, and has now fallen back to around 4.8 million US dollars.
CA:0x6135177a17e02658df99a07a2841464deb5b8589
Trump and his political philosophy
Trump and Biden have huge differences in policies on taxation, trade, infrastructure, peoples livelihood, and the international situation. As a businessman, he prefers a low-interest rate environment. He has previously said that if he is re-elected, he will not re-appoint Powell as the chairman of the Federal Reserve in 2026. Although Powell himself may not succumb to political pressure, those who hope to replace him are likely to cause trouble for Powell at the Feds interest rate meeting, leading to an increase in US inflation expectations.
The policy differences between Biden and Trump are mainly:
1. Fiscal and tax policies: Biden advocates higher tax rates on high-income earners and corporations, while Trump prefers tax cuts.
2. Monetary policy: Biden advocates maintaining the independence of the central bank, while Trump prefers to ask the Fed chairman to guide and implement a looser monetary policy.
3. Foreign policy: Biden advocates restoring the traditional leadership of the United States in international affairs and maintaining relations with its allies, while Trump is more inclined to independence and even to take unilateral measures.
4. Immigration policy: Biden supports a more relaxed immigration policy, while Trump advocates tightening border controls.
5. Economic policy: Biden is more concerned with government regulation of the economy, while Trump is more inclined to rely on market forces.
What is the Trumpflation?
Since Trump became the 45th President of the United States, the Trump Trade has frequently appeared in the financial market. It usually refers to the markets expected response to a series of fiscal, trade and regulatory policies that may be implemented during Trumps administration. These policies include tax cuts, relaxation of financial regulations, etc. These expectations often lead to specific volatility patterns in the financial market. In essence, the Trump Trade is a trading pattern driven by market expectations. ——From Minsheng Macro
Trumps loose fiscal and tight trade policies have exacerbated inflationary pressures in the United States and widened the gap between the U.S. economy and other countries. Some people believe that this policy will strengthen the dollar because the increased fiscal deficit will push the dollar higher. However, historical data shows the opposite result. When Trump took office in 2017, the dollar index was 101, and it fell to 90 in 2021 at the end of his term. On the contrary, during Bidens administration, the dollar appreciated significantly due to factors such as the epidemic.
Trump has long advocated reducing market regulation. Goldman Sachs analysts have said that a Republican administration is good for business and consumer confidence, which could lead to increased spending and investment, thereby boosting the earnings outlook for some companies and further supporting risk markets.
The current global economic environment has changed dramatically, and history may not repeat itself. When Trump was elected president, the United States was in an eight-year economic recovery. The market immediately surged after he won the election because people bet that the Republican president would be able to lower taxes and relax business regulations. But history may not be the same. The current economy is in a global interest rate cut environment and even faces the risk of recession. If U.S. inflation is triggered again, it will force the Federal Reserve to suspend the interest rate cut process and even jeopardize the recovery of the global economy. The actual direction of the capital market has always been complex and full of uncertainties.
Summarize
The shooting incident is good for the crypto market, but it is also a double-edged sword. From a positive perspective, Trump has long expressed support for cryptocurrencies, and the Republican Party as a whole is more inclined to adopt loose policies. This is undoubtedly conducive to the development of small and medium-sized enterprises, and is also expected to improve the current high interest rate environment, which is undoubtedly good for the crypto industry. But from another perspective, overly loose monetary policies may also cause the US economy to fall into recession, which in turn will have a negative impact on the crypto market. Overall, from July to September, before the dust settled on the election, the main hype clues in the market were still the expectation of interest rate cuts and political factors. It is worth looking forward to that Trump will attend the Bitcoin Conference and give a speech on July 24. Although he has a performative personality, his position in supporting cryptocurrencies is real. If Trump can successfully take office, the official recognition of the crypto market may be further enhanced. We also need to pay attention to short-term avoidance of FOMO during the investment process. In the future, it depends on whether he can introduce real substantive policies to benefit the crypto ecosystem.
Reference
3. From Kennedy to Trump: How did political assassinations change the course of American history?
4. The bull market is in danger! See how the past 12 bear markets came about
