Is Donald Trump trying to buy the US midterm elections? He promised every American $5,000 if Republicans win in November. But there’s a lot more nuance to it.
At the GOP convention in Dallas, Trump promised every adult American a “Trump Dividend” if Republicans keep control of Congress in November. The bill would cost around $1.2 trillion.
While it sounds illegal, Trump is hardly the first president to tie an election result to cash landing in voters’ bank accounts.
And every time this happened in the past, financial markets, including crypto, reacted.
Free Money for the Markets?
In January 2021, Joe Biden told Georgia voters that electing Jon Ossoff and Raphael Warnock would unblock $2,000 stimulus checks. They won, and Democrats took the Senate. Biden later signed $1,400 payments, completing the $2,000 total with earlier $600 checks.
Markets noticed. Cleveland Fed research found a significant jump in Bitcoin purchases around the exact $1,200 amount after Trump’s first COVID checks arrived in April 2020. Bitcoin trading volume rose about 3.8%. BTC also climbed sharply over the following month.
Stocks showed a similar effect. An NBER study found the first two US stimulus rounds increased retail buying and pushed up prices in stocks favored by retail investors.
Then came Biden’s $1,400 checks in March 2021. Bitcoin was already in a bull market, but moved from roughly $56,500 to above $60,000 within days. The S&P 500 also climbed through the following month.
But free cash does not necessarily guarantee a rally.
Former Republican Presidents Followed a Similar Strategy
George W. Bush sent tax rebates in 2001 and again in 2008. Stocks fell through much of both periods as the dot-com crash, 9/11, and the financial crisis overwhelmed any boost from household cash.
COVID gave us the cleaner lesson: when Americans suddenly receive disposable money, some of it can flow directly into risk assets.
Trump’s $5,000 promise would dwarf any individual COVID payment.
Whether it happens is another question. Congress would have to approve it. JD Vance has suggested wealthy Americans could be excluded and tariffs could fund the plan, although current tariff revenues fall far short of the cost.
For now, it remains a campaign promise. A very expensive one.
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