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Crypto markets are bracing for turbulence as Donald Trump’s inauguration draws closer. Arthur Hayes warns that high expectations for crypto policy shifts may lead to a sell-off before markets find stability later in 2025.
Market Hype Surrounding Trump's Inauguration
Even while many in the cryptocurrency industry are looking forward to the January 2025 inauguration of US President-elect Donald Trump, BitMEX co-founder Arthur Hayes has a different take on the matter.
There is a disconnect between market expectation and the reality of policy implementation, which Hayes pointed up when he warned against the high hopes of rapid crypto policy changes promised by Trump.
Hayes stated in his December 17 blog post titled "Trump Truth" that his investment fund, Maelstrom, intends to sell off some holdings early in order to purchase at reduced prices in the first half of 2025.
Hayes is of the opinion that governments throughout the world will not begin to establish national Bitcoin reserves anytime soon, contrary to the majority of predictions.
"The market believes that Trump and his people can immediately achieve economic and political miracles," Hayes wrote, pointing out a difference between what crypto investors want and the fact that there are "no politically acceptable solutions" that can be found quickly.
Arthur Hayes’ Crypto Warning and Market Volatility
Hayes forecasted that the market might be surprised by how long it will take for any changes to crypto policies to be implemented, and he added:
“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.”
Crypto will see a "crack-up-boom phase" in 2025, according to Hayes, who predicted a "harrowing dump" on the day of Trump's inauguration.
The investment firm Maelstrom, which is overseen by the family office of Hayes, will liquidate certain holdings in anticipation of a price decline in the markets around the time of Trump's inauguration in January, Cointelegraph points out.
"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.
Bitcoin’s Historic Surge and Future Uncertainty
To explain the sale, the businessman cited the fact that many hodlers "most often end up selling too early" and that long-term investors are "underinvested for the rest of the bull market." He continued by saying:
“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.”
With Trump's election as president in early November, cryptocurrency markets have been experiencing a major boom. By early December, Bitcoin had above $100,000 for the first time in history.
Bitcoin and decentralized finance may finally break through because to Trump's crypto policy shifts, according to a number of experts.
In 2025, Bitcoin is expected to have a "strong start," according to Matrixport, a cryptocurrency platform based in Singapore. The platform also predicted that many investors will look back and question why they didn't spend more.
Mixed Predictions for Early 2025 Crypto Market Trends
But early 2025 isn't going to be a bullish market for everyone; Hayes isn't alone. Protos states that there is speculation in the market over the possibility of a blackout period in January 2025 for MicroStrategy. This would mean that the company would not be able to issue shares or convertible bonds to buy more Bitcoin.
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