Arthur Hayes, the co-founder of crypto exchange BitMEX and investment company Maelstrom, predicts a potential crypto market crash in January.
The top crypto stakeholder made the shocking prediction in a recent Substack blog post. He noted that even though the recent crypto rally commenced following Donald Trump’s re-election, the market will experience a harrowing dump around his inauguration on January 20, 2025.
Factor That Could Trigger Major Dip
Ahead of his inauguration, crypto investors are expecting Trump to start implementing key policy changes for the industry on his first day in office.
Notably, Hayes acknowledges this high expectation among investors, which he claimed boosted crypto prices recently. However, he speculates that Trump might have only a year to effect key policy changes in the crypto industry.
The BitMEX co-founder said once investors realize that Trump cannot meet their lofty expectations of him, it could result in disappointment. Consequently, investors might start selling their assets, leading to a heavy market crash, which he characterized as a ‘harrowing dump.’
Maelstrom Investment Strategy
Hayes reveals the strategy his investment firm, Maelstrom, plans to utilize in anticipation of this massive market crash. According to him, Maelstrom will reduce its exposure to cryptos before the anticipated harrowing dump.
Following the dump, the investment company will rebuy some core positions at discounted prices within the first half of 2025. This suggests that Hayes expects the prices of cryptos to rebound after the massive sell-off; hence, the company will rebuy some core positions in anticipation of a future rally.
National Bitcoin Reserve Won’t Happen
Furthermore, he commented on specific promises Trump made during his campaign, especially the creation of a national Bitcoin reserve.
Despite praising the initiative, Hayes asserted that the creation of a national Bitcoin stockpile would not come to fruition under Trump’s administration. This indicates that the U.S. will not hold Bitcoin as a reserve asset.
The Bitcoin strategic reserve initiative has sparked major debates within the crypto industry since Trump first hinted at plans to set it up under his administration. As a result, U.S. Senator Cynthia Lummis (R-WY) proposed the Bitcoin Act 2024 as part of measures to strengthen the dollar. The bill requires the U.S. to accumulate 1 million BTC over five years, which will be held for 20 years.
While some crypto stakeholders do not support the initiative, asset managers like VanEck have endorsed it.
Meanwhile, Hayes’ bearish prediction comes as the crypto market witnesses a sharp decline, thanks to Bitcoin’s rollercoaster movement.
The market has fallen by 3.12% over the past 24 hours to $3.65 trillion. Over the day, Bitcoin has fallen by 2.77% to $104,666, while Ethereum is down 3.52% in the same timeframe to $3,865.
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