Arthur Hayes: Trump Administration’s Reality Will Lead to Crypto Market Dump
Arthur Hayes – The gap between the high expectations surrounding the upcoming Trump administration and the reality of what can be achieved is likely to trigger a significant crypto sell-off once Donald Trump is inaugurated, according to former BitMEX CEO Arthur Hayes in his latest essay.
Trump’s Inauguration and the Realities Ahead for Crypto Investors
Hayes, who now runs a family office called Maelstrom, explains that there are no politically acceptable solutions for Trump to rapidly implement the policy changes anticipated by crypto investors. He argues that Trump has little time to make the changes that have been widely expected, with Hayes stating, “The market will instantly wake up to the reality that Trump has at best one year to enact any policy changes on or around January 20th.” This realization, he adds, will lead to a “vicious sell-off in crypto” and other Trump 2.0 equity trades.
Despite this grim forecast, Hayes acknowledges that the crypto market is still in the midst of an extended price rally, which was sparked by Donald Trump’s victory in the November 2024 U.S. presidential election. Since Trump’s win, Bitcoin has surged more than 50%, increasing from approximately $68,000 to a record-high of $108,135, according to The Block’s Bitcoin price page.
Rising Expectations for Crypto Regulation Under Trump
Trump’s victory has sparked heightened expectations for a significant shift in crypto regulation, with the former president himself promising to do “something great with crypto,” including the creation of a national strategic reserve of Bitcoin.
However, Hayes argues that, given the timeline and political realities, the market is overly optimistic. “Most elected legislators start campaigning at the end of 2025 for the mid-term elections in November 2026,” he explains. “This is why I’ve given Trump just one year to enact any meaningful policy changes.” Hayes further clarifies that solving the domestic and international issues impacting the crypto space would require more than just a year, stating, “Even the most astute and powerful politicians would take over a decade, not just one year, to fix these issues.”
This outlook suggests that many crypto investors may be setting themselves up for severe buyer’s remorse, according to Hayes.
Prediction of a ‘Harsh Dump’ in Crypto Markets Around January 20, 2025
Hayes predicts that the crypto market will experience a “harrowing dump” around January 20, 2025, which is Trump’s inauguration day. In preparation, he reveals that his firm will begin to reduce its crypto holdings in advance to mitigate potential losses.
What If the Bull Market Continues Beyond Trump’s Inauguration?
Despite his cautious stance, Hayes also acknowledges the possibility that his strategy of selling early may backfire if the crypto bull market continues into Trump’s coronation. “Knowing this, we are committed to admitting defeat if the bull market steamrolls through January 20th, licking our wounds, and getting back on the bull,” Hayes comments, leaving room for flexibility should the market continue its upward trajectory.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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