Arthur Hayes, the former CEO of BitMEX, has raised concerns about a possible “vicious sell-off” of Bitcoin upon Donald Trump’s assumption of office. In a comprehensive blog post, Hayes expressed doubt about Trump’s capability to deliver on his ambitious crypto promises, such as transforming the United States into the “crypto capital of the world” and establishing a Bitcoin reserve.
Hayes Doubtful Over Trump’s Policy Implementation
Arthur Hayes is skeptical about the Trump administration’s ability to implement its ambitious policies within a 12-month window. He foresees Trump encountering substantial political hurdles, with his term being significantly influenced by the 2026 midterm elections, complicating the enactment of meaningful changes. Hayes articulates that, “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.” As market participants come to this realization, Hayes anticipates a “harrowing dump” for Bitcoin and other so-called “Trump trades.”
Bitcoin Reserve Unlikely?
Hayes also casts doubt on the feasibility of a U.S. Bitcoin reserve, suggesting that it is unlikely to come to fruition. However, he emphasizes that even the mere suggestion of such a reserve could generate significant buying pressure. According to Hayes, if the U.S. government devalues the dollar by increasing the money supply and allocates some of it for Bitcoin purchases, the fiat price of Bitcoin will escalate. This scenario could prompt other nations to follow suit, driving the price of Bitcoin even higher.
Despite believing that long-term Bitcoin holders might eventually sell at elevated fiat prices, Hayes considers the establishment of a U.S. Bitcoin Reserve (BSR) improbable. He argues that politicians are more likely to prioritize the use of newly created dollars for populist measures aimed at securing votes in upcoming elections.
Rapid Devaluation Of USD
Hayes anticipates that Trump, with the assistance of his economic advisor Mark Bessent, will pursue a rapid devaluation of the U.S. dollar, potentially through a dollar-to-gold devaluation in the first half of 2025. This strategy aims to foster a competitive economic environment in the U.S., enhance domestic production, and garner support for the Republican agenda.
He foresees that “another pillar to the crypto bull market” could emerge if Mainland Chinese investors are eventually permitted to engage with Bitcoin ETFs in Hong Kong. Furthermore, Hayes predicts that EU leaders might discreetly acquire cryptocurrencies while ordinary citizens grapple with inflation.
In Hayes’ view, Trump’s economic policies are poised to instigate global shifts in currency values and financial systems, positioning Bitcoin and other cryptocurrencies as key beneficiaries in the medium to long term. Nonetheless, while Hayes remains optimistic about Bitcoin’s long-term potential, forecasting its rise to $1 million, he cautions that the journey will be volatile, marked by significant price corrections along the way.
