Crypto Expert Warns of Market Dip Before Trump’s Inauguration

As January 2025 approaches, cryptocurrency market participants are optimistic about the potential impact of President-elect Donald Trump's inauguration, anticipating swift policy shifts.

However, BitMEX co-founder Arthur Hayes offers a more cautious outlook, warning against unrealistic expectations of immediate crypto policy changes.

In a December 17 blog post, Hayes shared that his investment fund, Maelstrom, intends to reduce certain positions early in the year, anticipating better opportunities to buy at lower prices later in 2025. He pointed out that despite market hopes, the creation of national Bitcoin reserves by the U.S. or other nations is unlikely to occur quickly, noting the gap between lofty expectations and the slow pace of political change.

Hayes believes the market’s optimism is misplaced, suggesting that any major crypto policy changes would take longer than many expect. He predicts that, once reality sets in—specifically, that Trump may only have one year to enact meaningful policies—the market will experience a sharp sell-off, followed by a period of volatility. Hayes envisions a “crack-up-boom phase” later in 2025, after an initial dip following Trump’s inauguration.

READ MORE:

Bitcoin Briefly Dips Below $100,000 – More Than $860 Million Were Liquidated

Given his expectations of a market decline, Hayes plans to trim his positions in advance, with the goal of purchasing assets at lower prices in the first half of 2025. He emphasized that long-term investors may be underexposed, and some may prematurely sell. However, Hayes is prepared to adjust his strategy if the market continues its upward momentum, pledging to buy on both dips and rallies.

Despite his more bearish forecast, Hayes is not alone in anticipating potential market setbacks in early 2025. Some rumors suggest that MicroStrategy may suspend its Bitcoin purchases, further adding to uncertainty.

Alexander Zdravkov