As the cryptocurrency world remains on edge with the political landscape evolving, Arthur Hayes, the former CEO of BitMEX, has issued a stark warning. He suggests that Bitcoin may face a significant sell-off upon Donald Trump’s return to the presidency. Through a comprehensive blog post, Hayes articulates his doubts about Trump’s ambitious cryptocurrency promises, including turning the U.S. into the “crypto capital of the world” and creating a national Bitcoin reserve.
Skepticism Surrounding Trump’s Cryptocurrency Policies
According to Hayes, the Trump administration will be constrained by a tight 12-month window to execute its visionary policies. This time frame is further compressed by the impending 2026 midterm elections, which pose substantial political challenges. Hayes argues that these factors will overshadow Trump’s term, making substantial policy changes difficult to achieve.
He notes, “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,” highlighting the political hurdles Trump may face. Once market participants grasp the reality of these challenges, Hayes predicts a “harrowing dump” for Bitcoin and other assets linked to the so-called “Trump trades.”
The Unlikelihood of a U.S. Bitcoin Reserve
Hayes also questions the feasibility of establishing a U.S. Bitcoin reserve, suggesting that it is unlikely to materialize. However, he emphasizes that even the idea of such a reserve could generate buying pressure in the market. He posits that if the U.S. government resorts to devaluing the dollar by printing more money and utilizes some of it to acquire Bitcoin, the fiat price of Bitcoin would likely surge. This could compel other nations to follow suit, driving the cryptocurrency’s price even higher.
Despite this potential scenario, Hayes remains skeptical about the establishment of a U.S. Bitcoin Reserve (BSR). He argues that politicians would likely channel newly created dollars toward populist initiatives aimed at securing votes in forthcoming elections, thus sidelining the idea of a BSR.
The Implications of a Rapid USD Devaluation
Hayes believes that under Trump’s leadership, with assistance from his economic advisor Mark Bessent, there could be a swift devaluation of the U.S. dollar. This devaluation might involve a dollar-to-gold realignment, potentially occurring in the first half of 2025. The goal would be to foster a competitive economic environment in the U.S., enhance domestic production, and garner support for the Republican agenda.
Moreover, Hayes envisions another potential “pillar to the crypto bull market” emerging if Mainland Chinese investors gain access to Bitcoin ETFs in Hong Kong. He also speculates that European Union leaders might covertly invest in cryptocurrencies as ordinary citizens grapple with inflation.
In Hayes’ view, Trump’s economic policies could instigate global shifts in currency values and financial systems. Bitcoin and other cryptocurrencies could emerge as key beneficiaries in the medium to long term. Despite his bullish outlook for Bitcoin’s long-term prospects, with predictions of its value reaching $1 million, Hayes acknowledges the journey will be fraught with volatility and significant price corrections.
