Arthur Hayes Predicts Market Downturn Post-Trump Inauguration – But It's Not All Bad News

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.

Cryptocurrency market participants were buzzing with excitement in November when news of Donald Trump’s re-election swept 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’.

And 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.

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.

Germany, the historic engine of European growth, has stalled. Gross Domestic Product has been shrinking for over a year now and its once thriving manufacturing sector is in disarray.The chart below shows that the balance sheet of the European Central Bank has been contracting… pic.twitter.com/FkJnysS00J

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.