The former CEO of BitMEX, Arthur Hayesissued a stark warning of a potential “heartbreaking collapse” of cryptocurrency markets when Donald Trump takes office on January 20, 2025.
Hayes argues that investors’ overly optimistic expectations about Trump’s economic policies will clash with the slow pace of real-world change, causing a sharp sell-off.
In his latest blog post titled “Trump Truth,” Hayes outlines his predictions for the cryptocurrency market as Trump prepares to take office for his second term.
Hayes believes that while Trump’s policies may foster asset price inflation and a weakening of the U.S. dollar in the long term, immediate results are unlikely.
“The market believes that Trump and his men can immediately pull off economic and political miracles,” Hayes writes. Hayes warns that the cryptocurrency market will have to face reality: “I believe that the cryptocurrency markets will experience a sharp decline around Trump’s inauguration day, January 20, 2025.”
Hayes explains that Trump only has a year to implement any significant policy changes before the midterm campaign begins in late 2025, which will limit his administration’s ability to implement meaningful reforms.
He also adds that structural economic problems cannot be resolved in such a short time frame, leaving investors facing disappointment.
Despite predictions of near-term volatility, Hayes remains confident in the broader cryptocurrency market, particularly the Bitcoin (CRYPTO: BTC).
He believes Trump’s policy goals – including weakening the U.S. dollar to reindustrialize America – will ultimately increase the global supply of fiat currency and drive demand for assets like Bitcoin.
“The Trump Truth shows me the structural flaws of the global order… The best way to maximize returns is to own Bitcoin and cryptocurrencies,” he stressed.
While acknowledging the risks of market timing, Hayes outlined his company’s strategy Maelstromwhich plans to reduce exposure before the inauguration and buy back positions during the expected sell-off.
“Maelstrom will lighten some positions early, hoping to buy back some key positions at lower prices in the first half of 2015,” he wrote.
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Hayes concluded by cautioning traders against underestimating the challenges Trump will face and stressed that while a short-term correction is likely, he remains committed to long-term cryptocurrency investing.
“We are committed to admitting defeat if the bull market breaks through January 20, licking our wounds and getting back in the saddle.”
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