$Bitcoin (BTC.CC)$ Multiple perspectives reflect the possibl...

$Bitcoin (BTC.CC)$ Multiple perspectives reflect the possible impact of changes in US policy on the Bitcoin market. Here, we can sort out your ideas at several levels and further analyze whether this logical deduction holds true.

1. Manufacturing backflow and growing electricity demand

The Trump era policy did promote the return of “Made in America,” with the intention of stimulating the revival of the manufacturing industry. If this policy continues to be implemented, it will indeed increase domestic demand for electricity and raw materials in the US. The backflow of manufacturing requires significant electricity support, and under existing infrastructure conditions, the US electricity supply in many regions is already close to being burdened. Therefore, the increase in demand for industrial electricity will inevitably increase the cost of electricity, which may affect the living space of energy-intensive industries (such as Bitcoin mining).

2. Increased mining difficulty and changes in Bitcoin supply

The difficulty of Bitcoin mining will indeed increase with time and computing power. As mining costs increase and the potential price of electricity rises, miners' profit margins will be further compressed. Under such circumstances, the number of miners may decrease, and mining computing power may decline, leading to a slowdown in the growth rate of Bitcoin supply in the market, and there may even be a relatively insufficient supply in the short term. This change could increase Bitcoin's scarcity.

3. Political stability and capital flows

Political turbulence periods such as general elections will cause some capital to flow into safe-haven assets such as Bitcoin. However, if the political situation stabilizes and safe-haven demand for capital decreases, then some speculative and safe-haven funds may gradually flow back into the stock market. Especially when the manufacturing return policy drives economic growth, stocks in the manufacturing industry and related sectors may receive more attention and attract more capital back to the stock market. This may indeed lead to increased liquidity in the Bitcoin market.

4. The possibility of “inflation” in the Bitcoin market

If the stock market attracts a large return of capital, and the Bitcoin price growth stagnates or even falls, the circulation volume of the coin industry will appear relatively large. As the new supply of mining decreases, the market's Bitcoin circulation is more dependent on holders selling or redistributing it. If a large amount of speculative capital withdraws from the Bitcoin market due to other market opportunities, there may be a short-term situation of oversupply, which seems similar to the phenomenon of “inflation” (although essentially, the amount of Bitcoin is constant, and strictly speaking, it is not considered inflation).

summed

In summary, the increase in electricity demand brought about by the return of the manufacturing industry, combined with the increase in mining difficulty, will further reduce the profit margins of Bitcoin mining, thereby limiting the supply of new bitcoins. However, if the political situation is stable and the stock market attracts the return of capital due to favorable policies brought about by the return of manufacturing, then the Bitcoin market may face the problem of excess liquidity in the short term, thereby depressing prices. This situation will not lead to “inflation” in the actual sense of the word, but it will cause an imbalance between Bitcoin's supply and demand and price fluctuations. In the short term, there may be an oversupply and price drop.