- Arthur Hayes predicts a market downturn is coming following Trump’s inauguration, despite initial optimism.
- The crypto market celebrated Trump’s re-election, but excitement has faded overnight following the Fed’s announcement of fewer-than-expected rate cuts in 2025.
- However, Hayes remains optimistic about Bitcoin’s long-term prospects.
- He suggests that EU financial repression may push investors towards Bitcoin as a safe haven.
Arthur Hayes is back at it with his end-of-year blog post – and it’s a doozy.
If you’ve got about thirty minutes, it certainly makes for an interesting (and oftentimes humorous) read.
But if you don’t, you’re in luck – I’m here to break it down for you.
The crux of Hayes’ latest opinion piece is that the ‘sugar hit’ (his words) of the Republican victory is starting to fade, and inauguration day will be a good day for Trump…but will signal the beginning of a sharp market downturn.
Related: EU MP Advocates for Bitcoin Reserve, Ex-German Finance Minister Criticises Country’s Crypto Policies
Trump Will Have to Navigate Tricky Political Climate to Revolutionise Crypto
The crypto market rejoiced in November when news of Trump’s re-election spread across media channels. The momentum reached its peak this week, when BTC breached US $107k (AU $172k) amid speculation of a US strategic reserve comprising Bitcoin.
However, the euphoria was dashed that very week, as the US Feds announced they’d likely only target two rate cuts in 2025, instead of the three most believed were coming.
The market pullback based on a political promise going awry forms the basis of Hayes’ opinion.
Basically, the outspoken founder of BitMEX praises Trump for being honest about the geopolitical landscape, in something he labels ‘Trump Truth’.
The Trump Truth I’m referring to is restricted to a narrow band of subjects. I’m not talking about whether Trump would tell you the truth about his d*ck size, his net worth, or his golf handicap. Rather, Trump Truth speaks to the actual relationships between different nation-states and the opinion of average American voters when they are at home in their safe space, away from the political correctness nazis.
Arthur HayesAnd while, in the voter’s mind, this means he’s speaking the truth about his intentions with crypto, Hayes believes the landscape is much more complicated than the community is willing to accept.
According to Hayes, Trump has approximately one year to enact any real change to digital asset legislation before the midterm election shakes up the Senate.
And he thinks that, when the market realises Trump’s ability to enact legislative reform is constricted, they will begin a ‘harrowing dump’.
Pressure on the EU Set Up to Benefit Bitcoin in the Long Run
It’s not all bad news, though.
Hayes admits that he could have got it wrong, and that the momentum of the current bull run could continue well past Trump’s inauguration.
Related: Bitwise Forecasts Ethereum Boom in 2025 Due to RWA Tokenisation Wave
If so, the market will be set up to capitalise on a changing global environment.
And even with Hayes’ prediction for a problematic mid-Jan for cryptocurrency, he believes Bitcoin is still on its way to a stronger 2025.
He suggests that a weakening EU economy may force governments to incentivise European assets over American, further debasing the EU compared to the US dollar (which is powering ahead at the time of writing).
When you have little option to invest in the stock, bonds, Forex or property markets, where might investors turn?
Yep, you guessed it.
Bitcoin.
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