Potential Impact of Opportunity Economy Policies on the crypto market

This week, the market has entered a wait-and-see period before the Jackson Hole meeting, with all parties paying attention to Powell's interpretation of the latest employment and inflation data, as well as guidance on future monetary policy, which will become an important reference for the September interest rate decision. It is worth noting that last Friday, a piece of news that did not attract much attention in the encryption community was that a Democratic presidential candidate announced the first clear economic policy framework - the "Opportunity Economy" framework.

This "opportunity economy" framework is a relatively left-leaning economic proposal aimed at reducing the cost of living for the American people through government policies in four areas: housing, healthcare, food and daily necessities, and childcare. If this proposal is implemented, it could potentially drive the crypto market to replicate the upward trend seen in 2021, but it may also reignite inflation in the United States.

The economic policy document is titled "Reducing Costs for American Families Agenda" and is essentially a $1.7 trillion subsidy plan. In terms of housing, it includes the construction of 3 million new homes, combating real estate speculation, and providing a $25,000 down payment subsidy for first-time home buyers. In terms of healthcare, it includes limiting drug costs, accelerating Medicare negotiations, and enhancing industry competition. For food and daily necessities, the focus is mainly on combating price fraud and improper pricing. In terms of childcare, it includes various tax relief measures.

These proposals promise to begin implementation within 100 days of taking office. However, the plan has also sparked controversy, mainly focusing on housing and food policies, as well as the overall budget. Opponents argue that radical housing policies will increase government debt, and food policies may disrupt market mechanisms. Nonprofit organizations estimate that the plan will increase the deficit by $1.7-2 trillion over the next 10 years, potentially exacerbating the debt crisis, raising inflation, and intensifying social conflicts.

For the crypto market, this policy may have short-term benefits, but there are risks in the long term. If implemented, the cost of living for middle-class families in the U.S. will decrease, and disposable income will increase, which could bring upward momentum to risk assets, especially high-growth tech assets. This is similar to the crypto bull market triggered by the COVID relief bill in 2021. However, in the long run, one must be cautious of the potential rise in inflation and monetary policy risks that may arise.

Of course, all of this also depends on whether the candidate can be elected and effectively implement policies. Continuous attention must be paid to policy trends in the future and their potential impact on the market.