California leaders, including Governor Gavin Newsom and Attorney General Rob Bonta, are challenging former President Trump’s threats to deploy federal troops to San Francisco. They argue the action violates state sovereignty and constitutional norms, with plans for immediate legal action if enforced. This standoff raises concerns about federal overreach and challenges California’s autonomy within its own borders. However, there have been no noticeable market reactions in cryptocurrency or any other financial markets, suggesting that this event may not be currently impacting traditional finance. Experts are predicting minimal market disruption unless a new regulatory framework is enacted. Similar deployments throughout history have led to legal battles, but have yet to significantly impact the crypto market.