Author: @Web3Mario
Summary: In the coming week, there is no doubt that global attention will focus on the U.S. election, so I took some time to carefully outline the upcoming timelines and core highlights, and to forecast the subsequent impacts. Overall, starting from Tuesday, November 5th, the election results will be announced successively over the next week, and during this period, the progress of result announcements will continuously impact asset prices.
Due to the differing election policies among states, the announcement of results for the U.S. election will continue for about a week.
While chatting with friends, I found that many people are not very clear about the time rhythm in the coming week. They believe that results will be available on the evening of November 5 (the morning of the 6th, Beijing time). In fact, due to the differing policies among states regarding ballot handling, counting rules, and mail-in ballots, there is variability in the announcement of results. Therefore, I will first outline the timing rhythm of the U.S. presidential election, starting with the overall election rhythm. In the coming period, the overall rhythm is as follows:
1. Election Day: The U.S. presidential election day is usually set for the Tuesday after the first Monday in November. Voters will cast their votes for the presidential and vice presidential candidates on this day. This is an indirect election, as voters are actually voting for the members of their state's Electoral College.
2. Electoral College Voting: The United States uses the Electoral College system. The number of electoral votes for each state is determined by the number of congressional representatives from that state (number of House members + number of Senators), totaling 538 electoral votes. Most states use the 'winner-takes-all' rule, meaning that winning a majority of votes in a state grants all of that state's electoral votes (Maine and Nebraska are exceptions). A presidential candidate must obtain at least 270 electoral votes to win.
3. Official Voting of the Electoral College: Members of the Electoral College cast their votes on the second Monday of December to formally elect the President and Vice President. The voting results are sealed and submitted to Congress for certification.
4. Congressional Certification: In early January of the following year, the new Congress will meet on January 6 to officially tally the votes of the Electoral College. If there are no objections, the election results for the President and Vice President will be confirmed.
5. Presidential Inauguration: The elected President and Vice President will take the oath of office on January 20, officially becoming the new President and Vice President, beginning their four-year term.
So on November 5th, U.S. time, most swing states will start voting from 6 AM and continue until 7 PM to 9 PM. After voting ends, the counting phase will immediately begin, but due to different policies in each state, the timing of result announcements varies. Here is a summary of the announcement timing for some key states, which typically report results later:
1. California: California allows a longer mail-in ballot receiving period; mail-in ballots will be counted as long as they are postmarked on the election day and arrive by the designated date. Additionally, due to the state's large population and the extended time allowed for counting, it often is one of the last states to announce complete results.
2. Pennsylvania: Pennsylvania typically does not begin processing mail-in ballots until election day, which leads to a slower counting process, especially in years with a high number of mail-in ballots. Moreover, as a key swing state, the vote count in Pennsylvania is usually under high scrutiny, but the counting process is completed relatively late. Therefore, the final results are announced several days after election day.
3. Michigan and Wisconsin: These two states also only process mail-in ballots on election day, and as swing states, close vote margins can lead to longer counting times to ensure accuracy; usually, ballot processing is not completed until the following evening.
4. Nevada: Nevada allows mail-in ballots to arrive several days after the election date, so results may be delayed for a few days, especially in election years with a high volume of ballots.
5. North Carolina: North Carolina allows mail-in ballots to be received up to 9 days after the election day, as long as the ballots are mailed before or on the election day. This often results in delayed announcements of the final results in the state, typically taking a week to reveal.
You may notice that aside from California as a stronghold for the Democrats, most are swing states, with Pennsylvania being a key battleground state; thus, the entire electoral contest will peak in the days following the conclusion of the general election.
The House of Representatives elections are also very important because they determine the implementation of the future fiscal policy of the United States.
In addition to the presidential election, the results of the U.S. House of Representatives elections are equally important. In the U.S. federal government, the President, Senate, and House of Representatives together form the core structure of the separation of powers. The President holds executive power, while the Senate and the House (collectively known as Congress) jointly hold legislative power. These three entities are both independent and closely related to achieve checks and balances and oversight. The House of Representatives, as the lower house of Congress, has the following main powers:
Legislation: The House of Representatives drafts and votes on bills, completing legislative functions together with the Senate.
Fiscal Authority: The U.S. Constitution stipulates that all fiscal and tax bills must be introduced in the House of Representatives first to ensure taxpayers have direct representation.
Impeachment Power: The House of Representatives has the power to initiate impeachment, which can be brought against the President or federal officials, but the trial authority belongs to the Senate.
Therefore, it can be said that the distribution of the House of Representatives determines the difficulty the President faces in implementing his economic policies. A president whose party does not hold a majority in the House is often referred to as a 'minority president,' and the difficulty of passing bills is generally very high. The House of Representatives elections are held every two years, and in election years, the House elections and presidential elections usually take place on the same day, typically on the first Tuesday of November in even-numbered years. On this day, voters will cast their votes for the President and all 435 House seats. Therefore, in general, the results of the two elections will be announced progressively within a similar timeframe, although the specific order may vary. However, typically, since the House districts are smaller, the vote counting speed is faster, so the results come in earlier.
Looking ahead to the subsequent impact of the election results
In previous articles, we have analyzed the economic policies of both parties. Here, I will briefly review them: the Democratic side led by Harris primarily focuses on 'opportunity economics' as its core economic framework, which can be summarized as increasing government investment and raising taxes, thereby enhancing the income levels of middle-class families in housing, healthcare, education, and daily necessities. The general market expectation is that Harris's economic policies will further increase the government's fiscal burden and undermine the dollar's credit. At the same time, the wealth effect generated by large-scale monetary easing will help boost inflation; however, since he adopts a government intervention approach to control prices of daily necessities, I believe inflation will follow a gradually accelerating upward trend.
Trump's economic policies can essentially be summarized in three dimensions: firstly, low tax rates domestically; secondly, high tariffs externally; and thirdly, using measures like interest rate cuts to lower the dollar's exchange rate against major manufacturing countries. Lastly, he opposes the new energy industry and advocates for boosting traditional energy industries; this policy is closely related to the interest groups behind him—the blue-collar class in the Rust Belt. Although isolationism and trade protection policies have been effective in curbing foreign products and revitalizing the U.S. mid- to low-end manufacturing sector, given the current industrial structure in the U.S., the implementation of these policies requires time and will be accompanied by high inflationary pressure. Even Trump must consider how to use the dollar's hegemonic status to alleviate these issues.
There are some signs indicating that he may choose to achieve this goal through Bitcoin, as Trump has repeatedly expressed concerns about the 'Bitcoin production capacity of the United States.' He advocates ensuring that the remaining Bitcoin will be produced in the U.S. Considering his support for traditional energy industries like oil, stimulating Bitcoin mining, which is an energy-consuming industry, helps increase oil demand and adds value to the industry. Secondly, Trump's views on Bitcoin have clearly changed during this term, shifting from initially not recognizing Bitcoin's value to acknowledging its value as a commodity. The logic behind this change is still related to the dollar's pricing power advantage. Given that the current liquidity of Bitcoin is mainly maintained through stablecoins pegged to the dollar, the dollar effectively holds the pricing power over Bitcoin. By recognizing Bitcoin as a commodity and actively promoting this consensus globally, dollar capital can establish an advantage in this field, thus harvesting benefits.
Thus, based on the above, I believe that if Harris is elected, the 'Trump trade' will quickly collapse, and BTC prices will rapidly retract; however, it will then re-enter a phase of oscillating upward. Other security token-type altcoin assets will be influenced by the wealth effect, leading to a resurgence of a bull market, resembling the widespread rally after the pandemic stimulus in 2021. Conversely, if Trump is elected, BTC prices will experience a 'Sell the truth' phenomenon in the short term, with some profit-taking actions; however, in the subsequent cycle, BTC prices will quickly enter a rising channel, while other altcoin markets may not easily see a comprehensive bull market, but will more likely experience wealth effect spillover from BTC appreciation, with funds rotating between several hot sectors, resembling market behavior after the end of 2023.
Of course, if the elected party becomes a 'minority president,' the situation will become more complicated, and we will need to continue to monitor the economic policy negotiations between the two parties; any proposed bill will undergo intense market negotiations, during which price volatility will significantly increase.
