The United States will vote in November, and this will affect the crypto markets (the Clarity Act is still at stake) as well as traditional markets. For the first time in history, the US government has invested fairly significantly in listed companies—see the case of Intel—and if the elections end with a Democratic victory in at least one of the two chambers, some analysts believe we could… see forces pushing in the opposite direction from those that drove certain stocks to record highs.
The basic idea is simple: if certain stocks have enjoyed a second youth thanks to the purchase of and/or the US government’s entry into their shareholder base, then that same US government as a minority shareholder could become a difficult burden to bear, especially if the Democrats were to take control of the House or the Senate. The most striking case is Intel, with a position worth nearly $9 billion. There are others as well.
Quantum sector under scrutiny
With the exception of Intel, the quantum sector is perhaps the one most affected by this new modus operandi of the US government. It is highly unusual to see the US government proceed with stock purchases, stakes, even minority ones, or other moves of this kind. This is a government led by a larger-than-life president preparing to face its first electoral check in what will be the most polarized elections ever.
| Company | Ticker | US stake / investment |
|---|---|---|
| Intel | INTC | Approximately 9.9% |
| MP Materials | MP | Potentially approximately 15% through convertible shares and warrants |
| Lithium Americas | LAC | Warrants equivalent to approximately 5% of the company |
| USA Rare Earth | USAR | Approximately 10% expected |
| GlobalFoundries | GFS | Approximately 1% expected |
| D-Wave Quantum | QBTS | Equity stake expected as part of federal funding |
| Rigetti Computing | RGTI | Equity stake expected |
| Infleqtion | INFQ | Minority stake expected |
| Trilogy Metals | TMQ | Approximately 10% + warrants |
This table summarizes the stakes already in place or expected in the future. In addition to being strategic, the companies on the list have become highly debated stocks precisely because of the US government’s participation in their shareholder bases.
No immediate sell-off, but…
There will be no automatic consequences. A possible electoral defeat will not turn into an immediate sell-off. The government will still be a shareholder, but there is a strong likelihood that oversight, lawsuits, and the use of legislative tools to scrutinize certain investments will increase.
It is absolutely impossible for the government to sell within a few days, but the markets could start pricing in a Congress less aligned with the President, with all that this could mean for transactions that have already been completed.
Among other things, regarding Intel shares, the US government is reportedly already entitled to sell one year after its intervention. If it does so, the sale will nevertheless take place in periodic tranches, with an effort not to weigh excessively on the stock.
