Crypto May See ‘Harrowing Dump’ Around Trump’s Inauguration, Warns Arthur Hayes

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As a seasoned researcher and analyst with a keen eye for market trends, I find Arthur Hayes’ predictions intriguing, given my own experiences navigating the volatile crypto landscape. While his prediction of a pre-inauguration dump seems plausible due to the high expectations surrounding Trump’s administration, I am cautiously optimistic about his subsequent bullish trend reversal.

Known crypto analyst and ex-CEO of BitMEX, Arthur Hayes, foresees a severe drop in the cryptocurrency market around President-elect Donald Trump’s inauguration. Yet, he also suggests that this predicted market plunge might pave the way for a robust bullish trend reversal afterward.

Hayes Warns Against Overblown Expectations From Trump

In a recent blog post, well-known cryptocurrency analyst Hayes expressed his thoughts about the potential direction of the crypto market in the upcoming year. Hayes suggests that there might be a gap between the high hopes for Trump’s administration among the crypto market and the actual political landscape, which could scare investors and lead to a substantial market crash.

According to Hayes, the market’s assumptions about what Trump can achieve are unreasonable, as it would be extremely difficult for him to satisfy his supporters enough to prevent the Democrats from regaining control of both legislative houses in 2026. This means that at best, Trump will only have a year left to implement any policy changes.

The crypto entrepreneur warned that the market’s realization of these limitations will trigger a “vicious sell-off” in digital assets. He revealed that his investment fund, Maelstrom, plans to book profits ahead of the anticipated sell-off and re-enter the market at lower prices during the first half of 2025. However, Hayes noted that he is open to “admitting defeat” if no market correction occurs by January 20.

The triumph of Trump in the U.S. presidential election has ignited renewed optimism within the cryptocurrency sector, pushing Bitcoin‘s value above the $100,000 mark for the first time. Currently, the combined worth of all cryptocurrencies amounts to a staggering $3.81 trillion.

Trump’s triumph has ignited discussions regarding the possibility of establishing a strategic national Bitcoin reserve. Such a step might inspire similar sovereign acquisitions by other countries. Yet, Hayes believes that the realization of this reserve is unlikely in the near future. He elaborated:

As a crypto investor, I may not anticipate direct US government purchases of Bitcoin, but that doesn’t dampen my optimistic view on its price. Regardless, the potential devaluation of gold could lead to an increase in dollar supply, which would then seek a place to settle – whether it be real goods/services or other financial assets like cryptocurrencies.

Contrasting Projections For BTC Price Action

Although Hayes anticipates a potential cryptocurrency market decline at the beginning of 2025, Matrixport, a digital asset financial services company, sees it differently. Based on a recent announcement, they foresee a robust beginning for Bitcoin as it enters 2025.

In a similar vein, it’s projected that Bitcoin could potentially reach $200,000 by 2025, as more organizations are expected to invest in this leading digital currency. A study conducted by crypto exchange Bitfinex suggests that Bitcoin may continue to rise after stabilizing around the $100,000 mark.

Matt Hougan from Bitwise suggested an even more aggressive prediction for Bitcoin’s price, stating that purchasing it before it reaches $500,000 could still be considered as making an early investment. Currently, Bitcoin is trading at approximately $104,002, experiencing a 2.8% decrease in the last 24 hours.

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2024-12-19 14:41