Trump’s inauguration may trigger crypto sell-off, says Arthur Hayes

Cryptocurrency market commentators and observers have predicted positive market trends associated with United States President-elect Donald Trump’s inauguration in January 2025, but BitMEX co-founder Arthur Hayes has a different perspective.

Hayes cautioned against the high expectations of quick crypto policy changes promised by Trump, highlighting a gap between market expectations and the realities of policy implementation.

In his “Trump Truth” blog post published on Dec. 17, Hayes said his investment fund, Maelstrom, plans to trim some positions early to buy later at lower prices in the first half of 2025.

Unlike many forecasters, Hayes doubts that the US and other countries will start creating national Bitcoin (BTC) reserves any time soon.

A gap between high expectations and no quick solutions

“The market believes that Trump and his people can immediately achieve economic and political miracles,” Hayes wrote, highlighting a wide gap between crypto investors’ high expectations and “no politically acceptable solutions” available quickly.

The enactment of any crypto policy changes would likely take significantly more time than the market might expect, Hayes predicted, adding:

“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 will lead to a vicious sell-off in crypto and other Trump 2.0 equity trades.”

As such, Hayes forecasted a “harrowing dump” around Trump’s inauguration day before crypto enters the “crack-up-boom phase” later in 2025.

Hayes’ Maelstrom plans to sell in advance

As Hayes expects the markets to experience a sharp drop on Trump’s inauguration in January, Maelstrom — an investment fund managed by Hayes’ family office — will clear some positions expecting to buy at a lower price.

“Maelstrom will be lightening up on certain positions in advance, hoping to rebuy some core positions at lower prices sometime in the first half of 2025,” Hayes said.

Related: Bitcoin may hit $200K by mid-2025 as price drops ‘will remain mild,’ says Bitfinex

The businessman justified the sale by stating that long-term investors are “underinvested for the rest of the bull market,” while many hodlers “most often end up selling too early.” He added:

“We are committed to admitting defeat if the bull market steamrolls through Jan. 20, licking our wounds, and getting back on the bull […] I will be buying dips and rips.”

Cryptocurrency markets have entered a massive rally following Trump’s victory in the presidential election in early November, with Bitcoin surging past $100,000 for the first time in history by early December.

Several analysts have predicted that Trump’s crypto policy changes will likely bring Bitcoin and decentralized finance mainstream.

Singapore-based crypto platform Matrixport said it expects Bitcoin to have a “strong start” in 2025, adding that many investors are likely to look back and wonder why they didn’t accumulate more.

However, Hayes isn’t alone in expecting some bearish market action in early 2025. According to Protos, there has been a market rumor that MicroStrategy may enter a blackout period in January 2025, which would halt the issuing of shares and convertible bonds to purchase more BTC.

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