Arthur Hayes predicts crypto will see 'harrowing dump' around Trump's inauguration

Link copied

Arthur Hayes predicts crypto will see 'harrowing dump' around Trump's inauguration

crypto :: 2024-12-18 :: source - theblock

Michael Nagle/Bloomberg via Getty Images

By Danny Park

The gap between the crypto market’s high expectations of the upcoming Trump administration and reality will cause a major crypto sell-off upon Trump’s inauguration, former BitMEX CEO Arthur Hayes said in his latest essay.

Hayes, who now manages a family office named Maelstrom, wrote that there are no politically acceptable solutions for Trump to quickly make policy changes widely expected by crypto investors. “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,” Hayes said. “This realization will lead to a vicious sell-off in crypto and other Trump 2.0 equity trades.”

The crypto market is still amid an extended price rally triggered by pro-crypto candidate Donald Trump’s win in November’s U.S. presidential election. Bitcoin rose over 50% since Trump’s win, bringing its price from around $68,000 to a record-high of $108,135, according to The Block’s bitcoin price page.

Trump’s win has raised anticipation for a drastic change in crypto regulation, as the former president himself vowed to do “something great with crypto,” including a national strategic reserve of bitcoin.

Hayes said most elected legislators start campaigning at the end of 2025 for the mid-term elections in November 2026, including the entire House of Representatives, which is why he gave Trump one year to make policy changes. “Fixing the underlying domestic and international issues that negatively affect them would take even the most astute and powerful politicians over a decade, not just one year,” Hayes said. “Therefore, investors are setting themselves up for severe buyer’s remorse.”

The Maelstrom CIO predicted the crypto market to experience a “harrowing dump” around Jan. 20, 2025, Trump’s inauguration day, and added that his company will reduce its holdings in advance.

Nonetheless, Hayes did foresee a possibility that his strategy backfires by selling early while the crypto bull market continues through 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,” said Hayes.