KeyTakeaways:
- Trump’s return could trigger a crypto market decline due to limited time for policy changes.
- Hayes doubts Trump’s Bitcoin strategic reserve plan, favoring short-term economic strategies.
- Crypto market shows signs of retreat, with Bitcoin and altcoins experiencing recent declines.
BitMEX co-founder Arthur Hayes has issued a warning to crypto investors, predicting that Donald Trump’s return to office could trigger a decline in the crypto market.
As Bitcoin and other digital assets continue to rise, Hayes suggests that realizing Trump’s limited time to enact policy changes could lead to a sharp sell-off, which would affect not only crypto assets but also the broader market.
Hayes highlights that Trump’s victory in the 2024 U.S. presidential election may not have the immediate transformative impact some anticipate on the crypto market. He points out that Trump will have less than a year after taking office to push through major legislative changes, particularly in sectors such as the crypto market.
Hayes stipulates that by the end of 2025, most U.S. legislators will begin campaigning for the 2026 mid-term elections, reducing the time frame for any substantial policy shifts.
Hayes expressed concerns that the limited time frame could frustrate crypto investors who rely on Trump’s promises. He pointed out that Trump’s plans, including creating a national strategic reserve of Bitcoin, are unlikely to be realized quickly.
Bitcoin Strategic Reserve: A Doubtful Prospect
One of Trump’s key promises has been to create a national strategic reserve of Bitcoin, which could drive up the crypto price. However, Hayes is cautious about this possibility. He explains that U.S. politicians are more likely to focus on short-term economic strategies to win votes in upcoming elections rather than committing to long-term investments in Bitcoin.
Hayes compares the situation to the U.S. government’s stance on gold, noting that the country holds more gold reserves than any other nation. If gold prices rise, Hayes argues, it could lead to increased spending, including in financial assets like Bitcoin, but the process would not be realistic.
He doubts the U.S. government will invest in Bitcoin nationally, suggesting that gold remains a more politically viable option for financial strategies.
Market Response to Hayes’ Prediction
Hayes’ prediction of a potential downturn in the crypto market has already begun influencing market sentiment. Bitcoin, which had risen more than 50% since Trump’s win, reached an all-time high of $108,135. However, recent market activity has slightly corrected, with Bitcoin’s price dropping by 2.5% to $104,140.
Other crypto assets have also seen declines. Ethereum, which had surpassed $4,000, dropped by 3.4%, while Cardano saw a 4% pullback. Other assets like XRP, Dogecoin, Shiba Inu, and Pepe coin also saw drops, signaling a potential market-wide retreat.
