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

Musk has publicly criticized the US SEC's "overregulation" of encryption multiple times, advocating for "managing 21st-century technology with 21st-century rules." If the "American Party" secures key positions in the 2026 midterm elections, it may promote the following policies:
Simplify compliance processes: for example, allowing banks to directly custody encryption, lowering the entry barrier 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, transactions below $300 in the crypto market are tax-exempt, reducing the cost of participation for users.
The "American Party" advocates for cutting government spending and debt, but Trump's "Big and Beautiful" plan may still expand the deficit (3.3 trillion dollars in spending), exacerbating market concerns about the dollar's credit. Historical experience shows that such policies tend to drive funds toward decentralized assets like Bitcoin. For example:
After Trump's victory in 2024, Bitcoin soared from $50,000 to $77,000 in just one week.
If the "American Party" strengthens its image of fiscal austerity, it may further consolidate Bitcoin's "safe-haven attribute."
The news of Musk announcing the establishment of a political party directly sparked attention in the crypto market, with Bitcoin experiencing a single-day fluctuation of over 5% and trading volume surging by 40% on July 5.
If regulatory easing is implemented, institutions such as Grayscale may accelerate the approval of Bitcoin ETFs and other products. Referring to the activation effect of altcoins after the approval of the Ethereum ETF, SOL, DOGE, and others may benefit.
If Tesla and SpaceX, under 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 in Bitcoin in 2021, which drove the price of the currency to soar.
Musk's control over the X platform (formerly Twitter) could 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 may 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 interest rate cut expectations, which would benefit risk assets (including encryption currencies).
Musk's personal actions: for example, whether to increase his holdings in Bitcoin, promote Tesla to accept encryption payments, etc.
The establishment of the "American Party" by Musk may boost the crypto market in the short term through policy expectations and emotional speculation, but the long-term impact depends on the actual policy implementation capabilities of the new party. If it successfully promotes regulatory easing and fiscal reforms, cryptocurrency may become a "beneficiary" of political and economic changes in the United States; conversely, if it becomes mired in a two-party game, the market may revert to being dominated by technical factors. Friends need to closely monitor the dynamics of the 2026 elections and the policy adjustments of regulatory agencies such as the SEC.