Arthur Hayes (co-founder at BitMEX) has predicted that the market for cryptos will experience a significant downturn around Donald Trump’s inauguration as US President.
Hayes attributes this potential decline to a mismatch between crypto investors’ high expectations and the political realities Trump will face after taking office on Jan. 20.
According to him, many in the crypto industry are overly optimistic about the immediate impact of Trump’s administration on the market. However, he argues that Trump’s ability to implement sweeping policy changes will be limited.
Hayes said that, while investors are expecting rapid changes in the political environment, there is no easy fix. Market participants will realize, therefore, that Trump is only given a maximum of one year to implement meaningful change before the mid-term election in 2026.
Hayes believes this impending realization could trigger significant sell-offs across the crypto sector and equities tied to Trump’s second term. This would mean that Bitcoin’s current rally to a record-breaking $108,000 might not be sustained as these political and economic realities set in.
Why Trump’s Timeframe is Limited
Hayes explains that the US midterm elections will be held in 2026. Hayes says this campaigning begins by 2025.
With the entire House of Representatives and many Senate seats up for grabs, Trump’s Republican majority could quickly weaken. Hayes stresses that even the best politicians would need years to fix the systemic problems fueling discontent among voters.
“He wrote:
“The issues that gave rise to Trump’s popularity are decades in the making. As such, there are no immediate solutions regardless of what Elon Musk tells you on X. Therefore, it is almost impossible for Trump to appease his base sufficiently to prevent the Democrats from retaking both legislative bodies in 2026.”
Hayes is prepared to accept alternative results despite his pessimistic prediction. Maelstrom is preparing to sell its stocks in preparation for the inevitable downturn. However, it’s also prepared to change if the bullish trend continues after the new administration.
Hayes’ insights are a cautionary note for investors navigating the volatile intersection of crypto markets and political developments. Hayes’ forecast shows that, even though the future may be uncertain in the near term, it is important to have realistic expectations and plan strategically for unpredictable times.
The market’s reaction to Fed Chair Jerome Powell’s statement that the Federal Reserve is not allowed to hold Bitcoin hints that Hayes’ suggestion of a delicate market balance holds weight.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
