Arthur Hayes, the former CEO of BitMEX, has recently warned that Bitcoin may experience a “vicious sell-off” when Donald Trump takes office. In a detailed blog post, Hayes expressed skepticism about Trump’s ability to fulfill his ambitious promises regarding cryptocurrency, including making the U.S. “the crypto capital of the world” and establishing a Bitcoin reserve.
Hayes Doubtful Over Trump’s Policy Implementation
Hayes articulates that his administration will only have 12 months to enact his ambitious policies. He believes Trump will face significant political challenges, with much of his term overshadowed by the 2026 midterm elections, making it difficult to enact meaningful change..
“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,” he writes. When this realization sets in among the markets, he says a “harrowing dump” lies in store for Bitcoin and other so-called “Trump trades,” he noted.
Bitcoin Reserve Unlikely?
Hayes also dismissed the idea of a U.S. Bitcoin reserve, suggesting it won’t materialize, and emphasized that the mere threat of such a reserve could create buying pressure.
Arthur Hayes suggests that if the U.S. government devalues the dollar by printing more money and uses some of it to buy Bitcoin, the fiat price of Bitcoin will rise. This would trigger other nations to follow suit and purchase Bitcoin to keep up, causing its price to increase significantly.
While Hayes believes that while long-term Bitcoin holders may eventually sell at a high fiat price, the U.S. Bitcoin Reserve (BSR) is unlikely to happen. He argues that politicians would prioritize using newly created dollars for populist measures to secure votes in upcoming elections.
Rapid Devaluation Of USD
Hayes believes that Trump, with the help of his economic advisor, Mark Bessent, will initiate a rapid devaluation of the U.S. dollar, likely through a dollar-to-gold devaluation in the first half of 2025. This move aims to create a competitive economic environment in the U.S., boost domestic production, and win support for the Republican agenda.
Hayes predicts that “another pillar to the crypto bull market” could arise if Mainland Chinese investors are eventually allowed to gain exposure to Bitcoin ETFs in Hong Kong. Additionally, Hayes predicted that EU leaders would secretly buy cryptocurrencies while ordinary citizens suffer from inflation.
Hayes believes that Trump’s economic policies will trigger global shifts in currency values and financial systems, with Bitcoin and crypto acting as key beneficiaries in the medium to long term.
Nevertheless, while Hayes remains bullish on Bitcoin’s long-term prospects, forecasting its rise to $1 million, he also remarked that the path to this goal will be volatile, with significant price corrections along the way.
