TL;DR
- Arthur Hayes predicts a potential crypto market crash as Trump’s inauguration on January 20, 2025, approaches.
- Bitcoin hit an all-time high of $108,260 following Trump’s victory, fueled by promises of pro-crypto measures such as a national strategic reserve of BTC.
- Maelstrom will reduce its crypto exposure before January 20, 2025, though it may reinvest if the market sustains its bullish trend.
Arthur Hayes, former CEO of BitMEX and current Chief Investment Officer at Maelstrom, has issued a warning about the future of the crypto market. According to Hayes, the days leading up to Donald Trump’s inauguration as President of the United States, scheduled for January 20, 2025, could trigger a sharp drop in cryptocurrency values. His prediction stems from the gap between investors’ expectations and the new administration’s actual ability to implement rapid policy changes benefiting the industry.
Since Trump’s electoral victory in November, the crypto market has seen significant growth, with Bitcoin reaching an all-time high of $108,260. This surge has been, and continues to be, driven by optimism that the new administration will introduce pro-crypto measures, including the possibility of a national strategic reserve of Bitcoin, as previously suggested by Trump. However, Hayes warns that these heightened expectations might prove unsustainable in the short term.
It Takes More Than a Single Term
In his analysis, Hayes highlights the limited timeframe for implementing major reforms. In his view, any significant policy changes would need to occur before the end of 2025, as the U.S. Congress—particularly the House of Representatives—will shift its focus to the midterm elections in 2026. Furthermore, he argues that many of the structural challenges facing the crypto sector and the economy at large would take more than a decade to resolve, even under an administration dedicated to such goals.
Hayes’ Strategy May Backfire
Given this outlook, Maelstrom has decided to reduce its exposure to certain cryptocurrencies before Trump’s inauguration, anticipating a potential sharp correction in the market. However, Hayes acknowledges that this strategy is not entirely risk-free, as the market could continue its bullish trend even after the inauguration. In such a scenario, the firm would be prepared to adjust its position and re-enter the crypto market to capitalize on the ongoing bull cycle
