The world of cryptocurrencies may be in for a rude awakening, BitMEX co-founder Arthur Hayes said. Hayes added that the market could “get hit hard” near Donald Trump’s presidency’s second inauguration on January 20, 2025. His prediction has raised a lot of eyebrows and concern as the market is currently rallying, fueled by optimism on pro-crypto regulation and the possible formation of a Bitcoin Strategic Reserve in the U.S. However, with a looming crisis environment, we ask ourselves what is next for investors.
Arthur Hayes’ Market Prediction: A Coming Crypto Crash?
Arthur Hayes announced that he believes that the cryptocurrency market will drastically plunge during the first few months of the year 2025. Hayes moved the year-end dump forward to January 20, 2025 – Trump’s inauguration day – in his recent blog post. This forecast has certainly fueled the never-ending discussions about the condition of the cryptocurrency market under current circumstances, with some investors preparing for changes in the overall climate for investment.
Still, Hayes fears a short bearish run and considers this week a big test for Bitcoin and the crypto market. However, he still holds a long-term bullish view. To some people, such a prediction might be alarming, but he is calm, knowing that there will be a market bounce after an adjustment period. According to Hayes, cryptocurrency would suffer the choice of a “crack-up-boom” in the post-dip phase of development, and therefore, cryptocurrencies’ expansion will continue.
Bitcoin Strategic Reserve and Trump’s Influence on the Market
Hayes credits the recent positivity in the crypto space, especially with the increasing talk of a Bitcoin Strategic Reserve (BSR) in the US following President Donald Trump’s suggestion that the US wants to become the world’s leader in cryptocurrency. Many people have cheered this move, and more so because most of the market investors wish that this move by PayPal is likely to propel more institutions to adopt Bitcoin.
Nonetheless, Hayes was skeptical of the possibility of the U.S. government buying Bitcoin as a form of national reserve. He argued that politicians would probably rather spend newly generated dollars on services than invest them in Bitcoin. Still, he does not consider the discussions around the BSR as a sign of a negative impact on the market. Hayes mentions that these talks are putting buying pressure, which has helped support cryptocurrencies in the past several months.
Short-term Market Setbacks and Long-term Optimism
Contemplating the future of Bitcoin and the role of cryptocurrency in it, Hayes kept an upbeat tone but warned that in the short term, there could be some pullbacks. He believes that the current run-up in cryptocurrency could face even lower prices and hikes toward them on the way. Hayes believes that the “harrowing dump” back in January could be one of the four significant corrections before the recovery in the second half of the year 2025.
This remains a significant factor in the crypto market has already depicted volatility in its prices. However, in recent weeks Bitcoin and other Altcoins have slightly dipped after listing new record market highs. For instance, Bitcoin was trading at about 2.5% downside toward the value of $103,440 after completing the ATH of $108,268. The effect was also observed with such altcoins as Ethereum and Cardano, the reason for which some market participants tried to guess.
Market Reaction and Investor Sentiment
Hayes has further heightened the market uncertainty feeling especially bearing in mind that many investors are at the moment booking profits given the increased prices. The overall market cap has fallen by close to 3%, and it is now denominated at $3.64 trillion. This has raised some anxiety despite the fact that many industry gurus still hold the market to be long-term.
According to Hayes, it will be beneficial to look for a short-term dip in January 2025 which will enable investors to get back into their positions at better prices. The outlook for the crypto market is still unpredictable, but with Hayes’s remarks the fluctuation and the opportunities for losses and the growth in the industry are shown yet again.
