1 min readPresident-Elect Donald Trump will return to Office with a Trifecta.
His re-election is expected to impact U.S. fiscal policy, mainly by extending parts of the 2017 Tax Cuts and Jobs Act (TCJA), potentially adding $5 trillion to the deficit by 2034. This would increase the debt-to-GDP ratio by about 1.4 percentage points, which is already at 123%. Increased borrowing could lead to higher interest rates and inflationary pressures, challenging fiscal stability. Bitcoin could perform well off the back of this macro backdrop as a hedge against monetary debasement and policy error.
Financial markets reacted positively to Trump’s reappointment, with stock indices surging due to expected tax cuts and deregulation. Treasury yields rose, indicating concerns over inflation and increased deficits. The U.S. dollar strengthened, reflecting investor optimism. Recent data shows NFIB optimism up post-election, and inflation inline with expectations at 2.6% despite pressures, with import cost reductions helping curb core goods prices.
Bitcoin reached record highs, breaking $93,000 as investors anticipate a more favorable regulatory environment under a Trump administration. We expect altcoins to outperform, in the near future, as Bitcoin marches on to break record highs after record highs, as Fed rate cuts are likely and a red sweep in Congress with pro-crypto representatives could make way for clearer regulation and innovation.
