From the Musk Effect to the "Great 12 Years": Analyzing the Link Between American Power Narratives and the Cryptocurrency Market

Power narratives used to be written in speeches and legislative texts, but now they also appear in trending topics, short videos, and exchange order books. Financial markets favor "storytelling futures" for a simple reason: a judgment that is easy to repeat often spreads faster than a page of models; the crypto market amplifies this speed into volatility, where sentiment arrives first, prices follow, and explanations often come late.
In late November 2025, Elon Musk made a "great 12-year span" judgment during a private gathering related to the Federal Cost Reduction Group (DOGE): after Trump completes his second term, JD Vance may succeed him for two more terms. Politico further reported that the gathering took place on November 22 in Bastrop, Texas, near properties related to Musk's SpaceX and Boring, attended by about 150 current and former members and their families, with Musk appearing via video and mentioning security concerns.
On the same timeline, the White House issued an executive order on March 6, 2025, to establish a "strategic Bitcoin reserve" and a "U.S. digital asset repository," emphasizing that Bitcoin held by the government would not be sold in principle, and requiring agencies to verify, summarize holdings, and transfer authority; the text of the executive order published in the Federal Register also stated that the reserves and repository would mainly consist of digital assets capitalized from criminal or civil forfeitures, setting deadlines of 30 days, 60 days, etc., for submitting evaluation reports. In July of the same year, the stablecoin legislation GENIUS Act passed the House and was sent to the president, and was signed into law on July 18, requiring stablecoins to be backed by highly liquid assets and to disclose reserves. Piecing together the above fragments forms a clearer map of a main line: the U.S. power narrative is pushing crypto assets from "marginal speculative products" to "financial instruments that can be governed by the state," and the market is also accustomed to betting ahead of institutional implementation.

01 "Great 12 Years" is More Than Just a Joke: How Timelines Rewrite Risk Discounting

There is a detail in Politico's report worth savoring: Musk did not attend in person but connected via video due to personal safety risks. This detail is not just gossip; it reinforces an emotion: political involvement brings real costs, and these costs often influence policy direction and capital expectations.
Why is the market obsessed with "timelines"? Because timelines can turn "uncertainty" into "quantifiable." In traditional finance, capital is willing to pay for certainty; in the crypto space, certainty is even scarcer, so the premium is higher. If the narrative convinces investors that regulatory and industry directions are more predictable over the next 10 years, the discount rate will naturally decline, and risk asset valuation models will become more lenient; conversely, if any cracks appear in the timeline, leverage will withdraw first, the order book will thin out, and volatility will spike immediately.
A more realistic interpretation is to view the "great 12 years" as a directional indicator rather than a contractual text. Elections, intra-party struggles, and international situations can all rewrite the script. To ground the narrative, one needs to find institutional evidence in the same direction: executive orders, legislative frameworks, regulatory rule drafts, and institutional capital allocation behaviors. Only when the narrative and the system align can the market have sustained fuel.

02 Why the Musk Effect Always Ignites: Coupling of Communication Chains, Leverage, and Symbols

Many people first paid attention to Musk due to his strong statements about DOGE, Bitcoin, or the tech industry. The ability of celebrities to influence markets is not mysterious; it stems from a replicable communication chain: short phrases ignite emotions, algorithms are responsible for spreading them, and order books and leverage turn emotions into prices. If we liken the crypto market to a river, information is like upstream rainfall, and leverage is more like a breach in a dam; the rainfall doesn't have to be heavy; as long as the breach is wide enough, the water will surge.
A more subtle change in 2025 occurred in "symbol coupling." DOGE is both a well-known memecoin and an abbreviation for the Federal Cost Reduction Group; the same set of letters appears in political news and crypto discussions, automatically generating associative chains, with trades often occurring first and explanations following. Politico also presented the background and personnel network of this group in its report. For novice readers, such events can be seen as "volatility indicators": when the light is on, the market is more likely to experience short-term fluctuations, and position management often matters more than opinions. The heat may also wear off; Musk's mention of security concerns in the gathering not only reinforces the costs of political involvement but also reminds the market: celebrity heat can ignite, but it is hard to guarantee long-term energy supply. Ultimately, what determines how far the trend can go is still the system and liquidity.

03 From Verbal Friendliness to Institutionalization: Strategic Bitcoin Reserves and SEC's "Project Crypto"

Narratives ignite emotions, while institutional documents resemble written system parameters.
On March 6, 2025, the White House released a Fact Sheet announcing the establishment of a strategic Bitcoin reserve and a digital asset repository; the text of the executive order (EO 14233) published in the Federal Register specifies that the U.S. policy goal is to establish a strategic Bitcoin reserve and to set up a digital asset repository managed by the Treasury for the centralized and secure management of non-BTC digital asset holdings, while requiring agencies to complete authority reviews and report submissions within specified timeframes. AP compared it to a "digital version of Fort Knox," mentioning that the government would retain about 200,000 seized Bitcoins; the same report also quoted "crypto affairs head" David Sacks, who referenced historical cases of the government selling seized Bitcoins and compared them to current valuations.
What is noteworthy is not "how much BTC the U.S. holds," but rather "how the government views BTC as a long-term managed asset." Once the national balance sheet begins to discuss BTC management methods, crypto narratives can hardly remain confined to self-indulgence within the circle, and traditional finance will find it harder to ignore. If Bitcoin is viewed as "digital gold," the strategic reserve adds a layer of national narrative shell to "digital gold," prompting the market to reassess its long-term risk premium.
A turning point also appears on the regulatory side. The SEC's official website published a speech and announcement from Chairman Paul S. Atkins on July 31, 2025, discussing the "digital financial revolution" and subsequently introducing "Project Crypto"; the SEC page shows that Project Crypto was publicly launched on August 5, 2025, and further elaborated on a regulatory path "centered on fairness and common sense" on November 12.
Reuters reported on July 31 that the SEC Chairman proposed a large-scale rule adjustment plan to adapt to crypto and on-chain transactions, which aligns with the industry's long-standing call for "tailored rule-making." Once the institutional level signals a shift from "law enforcement reliance" to "rule-making," the market will automatically associate two things: clearer compliance paths and lower entry barriers for institutions. At this point, the sources of price volatility may also change: the proportion driven purely by emotions will decrease, while the proportion driven by institutional dividends will increase. The market will still be volatile, but it will no longer be entirely dictated by trending topics.
To help novice readers better understand, "rule-making" can be likened to road markings: without markings, all vehicles are testing the driving space; once markings appear, speeds may actually increase because drivers know where the boundaries are.

04 Stablecoin Legislation and Dollar Spillover: On-Chain Cash Gains a Compliance Shell

Many newcomers to the crypto market often focus solely on Bitcoin's price fluctuations. However, if we view the on-chain world as a city, Bitcoin resembles a gold reserve, while stablecoins are more like cash circulating on the streets. Stablecoins are typically pegged to $1 and are used for transaction settlements, cross-border transfers, and on-chain lending; once cash has clear rules, business activities are more likely to expand.
Reuters reported that the U.S. House of Representatives passed the GENIUS Act on July 17, 2025, and sent it to Trump for signing; the White House's Fact Sheet on July 18 confirmed the bill's signing into law and emphasized the U.S.'s intention to take a leading position in the digital asset space. AP also noted that the GENIUS Act establishes a U.S.-level regulatory framework for stablecoins and mentioned the rising influence of the industry in Washington.
Breaking down the impact makes it more intuitive. The first layer is a decrease in trust costs: reserve disclosures and regulatory frameworks make more traditional institutions willing to use stablecoins as settlement tools. The second layer is a potential increase in demand for U.S. Treasury bonds: Reuters mentioned that stablecoin issuers need to hold highly liquid assets as reserves, with common choices including short-term U.S. Treasury bonds, and policy discussions also address their implications for dollar spillover. The third layer brings competition and risk to the table: AP mentioned that the bill attempts to enhance consumer protection and market stability but also noted the political space for discussions on conflicts of interest.
For traders, stablecoin regulations resemble "on-chain plumbing renovations." Thicker, more compliant plumbing is more likely to increase water flow; as the water flow increases, trading activity, lending scale, and on-chain settlement frequency will all be affected. Macro variables will also transmit more directly: the strength of the dollar, interest rate changes, and regulatory enforcement intensity will all impact stablecoin supply and costs, thereby affecting the risk appetite for crypto assets.

05 The Stronger the Light, the Clearer the Shadows: Conflicts of Interest, Moral Hazards, and Self-Protection

Power narratives often carry dramatic tension and can easily cast shadows. The closer political power gets to crypto business, the more likely conflicts of interest will enter the market's view. A Reuters report on April 2, 2025, mentioned that Democratic lawmakers requested the SEC to preserve records related to the Trump family's crypto business, expressing concerns over potential conflicts of interest; a Reuters investigative report on October 28 further depicted the cash flow scale of the Trump family's crypto business and sparked ethical discussions.
How does moral hazard affect prices? The path is actually quite short. If regulation is pulled by private interests, policy stability will be compromised; if investigations, lawsuits, and public opinion reversals occur in succession, leveraged funds often withdraw first, followed by liquidations, amplifying volatility. The market fears not just bad news, but uncertain boundaries and rules that can change at any moment.
In the face of an information deluge, a set of "three noise-reduction questions" is very useful, which can be quickly run through while reading the news. The first question: Can the news rewrite the boundary of the rules? ------ Executive orders, legislation, and regulatory rule drafts carry more weight; celebrity statements are more like emotional triggers. The second question: Can the news lower the entry barriers for institutions? ------ The clearer the custody, disclosure, and issuance frameworks, the more compliant funds are willing to enter. The third question: Can the news affect the supply of on-chain cash? ------ If stablecoin regulations reduce friction, on-chain turnover and trading activity are more likely to increase. If all three questions hit simultaneously, trend-level movements are more common; if only the heat is hit, short-term volatility is more likely.
The perspective can also focus on the trading entry itself. As the institutionalization process advances, users increasingly need low-friction trading paths and clearer operational processes. CEEX positions itself as a "full-asset aggregation trading platform" in its official introduction, emphasizing a one-stop aggregation experience and broker system design; for novice users, an aggregated entry often resembles navigation software, breaking down complex market conditions into more intuitive path choices, making trading actions easier to grasp.
Power narratives will continue to create new plots, and the "great 12 years" will be retold repeatedly. However, how far the market can go ultimately depends on the speed of rule implementation, changes in on-chain cash, and the depth of institutionalization. It is fine to observe the excitement, but positions need to be guarded; focusing back on the system and cash flow makes it easier to maintain rationality amid volatility.