Former BitMEX CEO Arthur Hayes anticipates a sharp decline in the digital asset market following the January 20 inauguration of President-elect Donald Trump. In a recent Substack post, Hayes outlined his concerns about unmet expectations surrounding Trump’s crypto policies, suggesting they may trigger a “harrowing dump” in the market.
Policy Expectations vs. Market Reality
Hayes predicts that Trump’s anticipated pro-crypto policies could fall short of investor expectations, creating a selloff scenario. He also revealed that his investment firm, Maelstrom, plans to sell certain positions before repurchasing at lower prices, reflecting his bearish outlook.
“There exists a wide gap between crypto investors' high hopes for rapid policy changes and the political reality that no quick solutions are likely,” Hayes wrote.
Despite his bearish forecast, Hayes remains open to being proven wrong should the bull market continue past the inauguration. “If the market defies expectations, we’ll admit defeat, lick our wounds, and rejoin the bull run,” he said.
Trump’s Crypto Agenda
Donald Trump has campaigned on a crypto-friendly platform, promising a regulatory framework favorable to the industry. During the Bitcoin 2024 Conference, Trump pledged that “the rules will be written by the people who love your industry, not hate your industry.”
Additionally, Trump has committed to replacing outgoing SEC Chair Gary Gensler, known for his aggressive enforcement actions, with crypto-friendly former SEC Commissioner Paul Atkins.
Arthur Hayes: A Controversial Figure
Hayes, a prominent figure in the crypto world, has a controversial history. He stepped down as CEO of BitMEX in 2020 after being charged with violating the Bank Secrecy Act. In 2022, he pleaded guilty to failing to implement adequate anti-money laundering measures, resulting in six months of home confinement, two years of probation, and a $10 million fine.
Market Outlook
As Trump prepares to take office, the crypto market faces uncertainty, with investors closely watching for regulatory developments. Hayes’ predictions underscore the potential for volatility, particularly if policy changes fail to meet the high expectations of crypto advocates.
