Arthur Hayes, the former CEO of BitMEX, has forecasted a significant sell-off in cryptocurrency markets coinciding with Donald Trump‘s inauguration on January 20, 2025. Hayes, currently at the helm of a family office named Maelstrom, contends that the market’s optimistic outlook for swift regulatory reforms under Trump will likely result in disillusionment. In a recent blog post, the author discusses the constraints facing Trump as he seeks to enact substantial changes, noting that the focus will soon pivot to the upcoming 2026 mid-term elections.
In the wake of Trump’s election victory in November, the cryptocurrency market has seen a significant surge, with Bitcoin rising by more than 50%. Investors are optimistic about Trump’s commitment to establishing a regulatory framework favorable to cryptocurrency, anticipating significant changes. The expectations stem from Trump’s promises to establish a national Bitcoin reserve and reform cryptocurrency regulations. Hayes expresses skepticism, contending that Trump is unlikely to deliver these promises promptly. Given the current political landscape, significant policy changes will likely require more time than the market anticipates.
Hayes cautions that the disparity between what investors anticipate and the current political landscape will lead to a significant sell-off in the cryptocurrency market. “The market will quickly come to terms with the fact that Trump has, at most, one year to implement any policy changes,” Hayes stated. He forecasts a significant decline in cryptocurrency prices, anticipating that the sell-off will commence around Trump’s inauguration.
In light of this forecast, Hayes’ Maelstrom fund is set to decrease its holdings, bracing for a price decline anticipated for early 2025. The expert noted that while the market is buoyant, swift regulatory measures may not follow, potentially resulting in regret among investors. Hayes admitted that should the market maintain its upward trend, his strategy might not yield the desired results. He highlighted that Maelstrom stands ready to adapt and reinvest in the market should the bull run persist.
While Hayes maintains a cautious perspective, confident analysts, notably from Matrixport, anticipate a robust beginning for Bitcoin in 2025. Supporters argue that Trump’s pro-cryptocurrency policies may contribute to an increase in prices. Hayes expresses caution, highlighting the inherent volatility of the crypto market and the potential for a significant correction as the initial enthusiasm surrounding Trump’s presidency diminishes.
Amid ongoing scrutiny of regulatory developments, Hayes’ remarks underscore the ambiguity regarding Trump’s capacity to fulfill his cryptocurrency commitments shortly. He predicts that the current optimism in the market could soon be replaced by a stark reality in the months ahead.