As the 2024 US presidential election approaches, tech mogul Elon Musk has chosen to stand up for Trump, a move that has not only made him more visible on the global political stage, but has also sparked deep thought about his future fate. If Trump loses the election and the Democrats return to power, Musk will become the target of their suppression, and his business empire will face major challenges. More importantly, Musk's close ties to the cryptocurrency market mean that if he loses power, the cryptocurrency market may also fall into turmoil or even collapse.
Why does Musk support Trump?
The "Green New Deal" promoted by the Democratic Party is intended to vigorously develop new energy. On the surface, it seems to be beneficial to Tesla, but in fact it has a negative impact on Tesla. For example, the Biden administration's subsidy policy for the automotive industry tends to favor companies with unions, and Tesla has not received due support in certain federal policies because it does not support unions. This unfair treatment of Tesla has led Musk to publicly criticize the Biden administration's bias many times, saying that his and the company's contributions to the development of electric vehicles have been deliberately ignored.
Musk's public support for Trump was not a sudden impulse, but a well-thought-out strategic choice. During Trump's administration, many policies were implemented that were favorable to technology companies and the wealthy class, such as tax cuts, deregulation, and the promotion of innovation. This business-friendly policy environment has given Musk's Tesla and SpaceX huge development opportunities. Tesla's market value exceeded $100 billion during Trump's administration, making it one of the world's most valuable auto companies, and SpaceX's Starlink project and Mars exploration plans have also received support from the US government.
In this environment, Musk's business empire has expanded rapidly and gained a worldwide reputation. The Trump administration's loose economic policies have provided Tesla and SpaceX with huge room for innovation and reduced tax burdens, enabling these companies to be more competitive in the global market. Therefore, Musk's expectations for Trump's re-election are obvious.
The dilemma Musk will face if Trump loses the election
If Trump loses the 2024 election and the Democrats return to power, Musk's future will become uncertain. The Democratic Party has always been critical of big tech companies, advocating for stronger regulation, protecting workers' rights, and controlling the monopoly of tech giants. If the Democrats control the White House and Congress, they are likely to conduct stricter scrutiny and suppression of Musk and his companies.
1. Strengthening of antitrust investigation and supervision
The rapid expansion of Tesla and SpaceX has attracted the attention of many people, especially in the electric vehicle market, where Tesla has almost dominated. The Democratic government may pass antitrust bills to investigate Tesla's market share in the electric vehicle field, question its monopoly behavior, and propose possible market splits or strict market restrictions. At the same time, SpaceX's success in the aerospace field has also enabled it to obtain a large number of US government contracts. The Democratic government may review the fairness of these contracts and even reallocate resources to other competitors.
In addition, under the Democratic Party, supervision in areas such as environmental protection and labor rights will be further strengthened. Workers' rights, union issues, and carbon emission supervision in Tesla's production chain may become obstacles to the future development of Musk's company. These additional regulatory burdens may significantly increase the operating costs of Musk's company and hit his expansion plans.
2. Changes in tax policies
The tax cuts during the Trump administration have greatly benefited the rich and large companies, and Tesla and SpaceX are among the main beneficiaries of this policy. After the Democrats come to power, they are likely to launch a series of "anti-rich" policies to narrow the gap between the rich and the poor by increasing taxes on the rich and corporate taxes. As one of the richest people in the world, Musk will be the first to face higher tax pressure.
Tesla and SpaceX's profits could be significantly reduced by higher tax rates, affecting their global expansion plans and technology R&D investment. This pressure will further weaken Musk's influence in the global business sector and may lead to a plunge in their stock prices and a loss of investor confidence.
The future of the cryptocurrency market is at stake
Musk is not only an innovator in the field of science and technology, but also has a huge influence in the cryptocurrency market. He expressed his support for cryptocurrencies such as Bitcoin and Dogecoin through social media such as Twitter, which directly promoted the price increase of these digital assets. His speeches often cause drastic fluctuations in the market, and he is an important "opinion leader" in the cryptocurrency market.
However, if Trump loses, Musk's business plan will be frustrated, and his support for cryptocurrencies will be greatly weakened. The Democratic government is more conservative and cautious about cryptocurrencies, believing that there are a lot of risks such as money laundering, tax evasion, and market manipulation. It is very likely to introduce stricter regulatory policies and even ban some cryptocurrency trading activities.
1. Collapse of market confidence
Musk has repeatedly promoted the development of cryptocurrencies through tweets and interviews. His support has not only injected strong confidence into the cryptocurrency market, but also attracted a large number of investors. However, once Musk is suppressed for political reasons, his influence will be greatly weakened. Investors may lose confidence in cryptocurrencies, leading to a large-scale market sell-off.
When a large amount of funds withdraw from the cryptocurrency market, the prices of mainstream cryptocurrencies such as Bitcoin and Ethereum will fall sharply, and market volatility will increase. This will not only deal a serious blow to investors in the cryptocurrency field, but will also affect the stability of the entire financial market.
2. Cryptocurrency regulatory storm
With Musk supporting Trump's reelection, once the Democratic government comes to power, it is very likely that strengthening the regulation of cryptocurrencies will be one of its priorities. They may introduce new laws and regulations to restrict or completely ban the use of cryptocurrencies, especially Bitcoin and stablecoins, which are becoming increasingly important in the financial system. Previously, the U.S. Securities and Exchange Commission (SEC) has repeatedly expressed its desire to increase regulation of cryptocurrencies, and this process may accelerate once the Democrats take control.
Cryptocurrency essentially relies on decentralization and free market characteristics that are free from regulation of the traditional financial system. If the government intervenes too much, this will shake its foundation, and many innovative projects will have to face the dual pressures of compliance and regulation.
Conclusion: Trump's defeat will trigger a chain reaction
In general, the result of Trump's reelection will not only affect the political landscape of the United States, but also have a profound impact on the global technology community and the cryptocurrency market. Musk publicly supports Trump and bears huge political risks. If Trump loses the election, the Democratic Party may suppress Musk through regulatory and tax policies, weakening his influence in the fields of technology and business. Musk's loss of power will directly affect the market prospects of cryptocurrencies, leading to a loss of investor confidence and a market collapse.
Therefore, the possibility of Trump's defeat not only means changes in American politics, but is also likely to trigger a chain reaction of the fall of technology giants and turmoil in the cryptocurrency market.
