Arthur Hayes warns of crypto sell-off post Trump's inauguration in January
Arthur Hayes warns of crypto sell-off post Trump's inauguration in January
Arthur Hayes, co-founder of BitMEX, has forecasted a significant downturn in cryptocurrency markets around the January 2025 inauguration of President-elect Donald Trump.
In his Dec. 17 blog post titled "Trump Truth," Hayes cautioned against the high expectations surrounding Trump's promises of crypto-friendly policies, emphasizing the gap between investor optimism and the realities of policy implementation.
Hayes highlighted a widespread belief that Trump's administration will swiftly deliver economic and political solutions favorable to cryptocurrency markets. However, he argued that these changes would require time, leading to disillusionment among investors.
“The market will instantly wake up to the reality that Trump has, at best, one year to enact any policy changes,” Hayes wrote, predicting a sharp market correction around inauguration day. He anticipates this sell-off to be a prelude to a more significant "crack-up-boom phase" in the latter half of 2025, where the markets could recover and surge.
Maelstrom’s strategy
Hayes revealed that Maelstrom, the investment fund he manages, plans to sell select positions ahead of January 20, expecting to re-enter the market at lower prices during the first half of 2025. He admitted the risk of being wrong but maintained his confidence in buying dips during the anticipated correction.
This cautious approach contrasts with broader market sentiment, which has been overwhelmingly bullish since Trump’s election win in November. Bitcoin recently surpassed $100,000 for the first time, and analysts, including Singapore-based Matrixport, predict strong market growth in early 2025.
Hayes’ outlook reflects the uncertainty surrounding Trump’s crypto policies and their timeline for enactment. While many believe the administration could bring Bitcoin and decentralized finance into the mainstream, Hayes’ warning serves as a reminder of the market’s vulnerability to over-optimism and delayed implementation.
As investors await the inauguration, the dynamics between expectation and reality may shape market behavior in the months to come.
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