Arthur Hayes, the former CEO of BitMEX, has recently voiced concerns about a potential “vicious sell-off” in the Bitcoin market as Donald Trump assumes office. In a comprehensive blog post, Hayes expressed doubts about Trump’s capacity to deliver on his ambitious cryptocurrency promises, such as transforming the U.S. into “the crypto capital of the world” and creating a Bitcoin reserve.
Hayes Doubtful Over Trump’s Policy Implementation
Hayes elaborates that Trump’s administration will have a limited 12-month window to execute its ambitious cryptocurrency policies. He anticipates Trump facing substantial political obstacles, especially with the looming 2026 midterm elections, which could hinder significant policy changes.
“It is almost impossible for Trump to appease his base sufficiently to prevent the Democrats from retaking both legislative bodies in 2026. The people are impatient because they are desperate,” Hayes writes. This sentiment, when realized by the markets, could lead to what Hayes describes as a “harrowing dump” for Bitcoin and other investments linked to Trump.
Bitcoin Reserve Unlikely?
Hayes also questioned the feasibility of establishing a U.S. Bitcoin reserve, suggesting that such a development is improbable. He emphasized that even the speculation of a Bitcoin reserve could generate buying pressure.
Arthur Hayes suggests that if the U.S. government were to devalue the dollar by printing more money and allocate some of it to purchase Bitcoin, the fiat price of Bitcoin would likely rise. This could prompt other nations to follow suit, boosting Bitcoin’s price further. However, Hayes argues that the creation of a U.S. Bitcoin Reserve (BSR) is unlikely. He believes politicians would rather use newly created dollars for populist initiatives to secure votes in upcoming elections.
Rapid Devaluation Of USD
Hayes speculates that Trump, with assistance from his economic advisor, Mark Bessent, may initiate a rapid devaluation of the U.S. dollar, potentially through a dollar-to-gold devaluation strategy set for the first half of 2025. This maneuver aims to foster a competitive economic environment in the U.S., stimulate domestic production, and garner support for the Republican agenda.
According to Hayes, “another pillar to the crypto bull market” could emerge if Mainland Chinese investors gain access to Bitcoin ETFs in Hong Kong. Furthermore, Hayes predicted that EU leaders might discreetly purchase cryptocurrencies while their citizens grapple with inflation.
Hayes contends that Trump’s economic strategies could incite global shifts in currency values and financial systems, with Bitcoin and cryptocurrencies standing to benefit significantly in the medium to long term. Despite his bullish outlook on Bitcoin’s future, projecting its value to soar to $1 million, Hayes cautions that the journey will be volatile, with notable price corrections expected along the way.
