How Does the Government, Leaders, and Companies Affect Stocks and Digital Currencies?
- Landon
- May 15
- 3 min read
Updated: Jun 7
Intro: The importance of market influence
When evaluating financial assets such as stocks or digital currencies, prices can be determined by many factors but one of the most important factors is influence. Today we are going to break down how three forces can influence the price of an asset; the government, strong leaders, and companies. For an investor, this is very important to keep up with so you can keep up to date with government regulations and the importance of an asset to the mass audience. Whether a CEO posts a social media post or the SEC releases new tax laws on currencies, this is going to push prices up or down depending on the outlook from consumers in our country. Traditional blue-chip stocks have historical data to back up why something like volatility might occur, but digital assets are too modern and require research to identify why pressure causes volatility. By examining these three forces mentioned earlier, we can better understand shifts in the global economy and gain more knowledge on important subjects like tax laws and requirements.
Government influence: Regulations and tariffs
Our government arguably has the most influence on markets, because they decide the structural framework for tax regulations and tariffs. Over the past year, tariffs have played a huge role in the tech sector of the market. There have been many supply chain issues that have impacted technology, which ultimately affects cryptocurrencies because these parts are the components that are used to mine currencies and network blockchains together. Since cryptocurrency is affected by this, traditional trade policies have a mirror effect on crypto assets, driving up the cost and slowing down growth. From a tax standpoint, we are going to use a past article to show how this affects the acknowledgement of digital assets. Whenever Fannie Mae released their crypto backed mortgages, it gave investors the opportunity to pledge Bitcoin as collateral, creating a non-realization event that helps the investor to avoid heavy capital gains taxes.
Company influence: Integration and fees
Private companies integrate digital assets into their platforms, and it can shift the way investors behave towards certain releases. We are now seeing some companies use cryptocurrencies as a treasury account, basically incorporating blockchain into their operations. Companies like MicroStrategy hold over 818,000 BitCoin, and that is almost 4 percent of the total supply created. When a public company treats digital assets like a primary reserve currency, their stock performance is going to be linked to the volatility in the crypto market. This is what is known as a “feedback loop”, linking corporate earnings to the swings in a market such as crypto. Companies are no longer just experimenting with cryptocurrencies, but are treating it the same way as cash. J.P Morgan now has a network called Onyx that settles trillions of dollars worth of tokens daily that replace the long, annoying transfer waits with 24/7 clearing. Keeping up with news like this can help an investor understand why an asset could be more volatile and is a good strategy to make more fact-backed decisions.
Leadership influence: Market influence and innovation
Individual leaders can sway market prices with the introduction of products and incentives to purchasing something. A prime example in the crypto world is index funds like Bit10, which track the largest token leaders and crush them all into one fund. This can help reduce concentration risk compared to investing in a single token, which can show better growth rates that can compete with historical funds like the S&P 500. These leaders are often offering incentives as well, like Ripple providing a high APR rate on XRP investments that will attract more investor activity. This is to compete with traditional accounts like the High Yield Savings Accounts, and to provide more stability these leaders are incorporating major safety features to ensure your finances are safe with them. Political leaders are also a huge influence on the market, like when Donald Trump introduced the Trump Coin. Donald Trump has been known as one of the best investors in our time, and even controlled lots of New York back in the 1990s. Whenever someone with this power introduces their own token, there will be a market for it because of the rapid success investors have seen in the past.
May 15, 2026
