Arthur Hayes sees a collapse of the bitcoin market with Trump’s assumption of power

Former BitMEX CEO Arthur Hayes predicts that cryptocurrencies will face a significant drop following the inauguration of Donald Trump as president of the United States on January 20. The analysis was published by Arthur himself on Substack.

According to Hayes, cryptoasset investors have very high expectations about how quickly Trump could implement changes. However, the businessman consider that there are no politically viable solutions that would allow the president to satisfy those demands, at least not immediately.

In this way, the billionaire argues that the market will soon realize that Trump will need at least a year to implement profound changes, leading to a cryptocurrency sell-off. Hayes points out that most US congressmen will begin their political campaigns in late 2025 – ahead of the 2026 midterm elections – and warns that Republicans are likely to lose their legislative strength in both chambers of Congress after November 2026.

«The entire House of Representatives and a large number of senators will face elections in their positions. The Republican majority in both chambers is very fragile, and they are likely to lose their political control after November 2026. Meanwhile, the discontent of the American people is understandable, and addressing the domestic and international issues that negatively affect them would require more than a decade, even for the most skilled politicians… Not just a year. For this reason, many investors could end up experiencing deep regret about their decisions.

Arthur Hayes, former CEO of BitMEX.

Although Hayes makes it clear that his firm, Maelstrom, will begin selling “certain positions” with the intention of buying them back later at a lower price, he also recognizes that no one has the absolute truth and accepts the possibility of being wrong. “We are willing to admit our defeat if the bull market continues until January 20, licking our wounds and returning to the upside,” commented the businessman, who added that he will continue buying bitcoin in both declines and rises.

The writing does not stop there, as it also addresses the historical and current situation of gold and the dollar. It is mentioned that the price of gold, set at USD 42.22 per ounce, could be adjusted to decrease the value of the dollar. Hayes argues that this would increase the number of dollars in circulation and increase the Treasury balance, which would lead other countries to try to reduce the value of their currencies. However, the billionaire claims that nations would not be able to match this reduction without facing the risk of hyperinflation, given that the US currency remains the main global reserve asset.

The founder of Maelstrom states that, if the US government opts for a significant devaluation of the dollar, this could reindustrialize the country’s economy and drastically impact the value of gold, driving it to much higher prices, between $10,000 and $20,000 per ounce. In fact, the businessman links this possible devaluation with the impact it would have on the price of bitcoin and other cryptocurrencies, since a weaker dollar could lead to a surge in interest in gold and crypto assetssince investors would seek refuge from the depreciation of the fiat currency.

«If the US government creates more dollars through a devaluation of gold and uses part of those dollars to buy bitcoin, its dollar price would increase. This, in turn, would cause competitive buying by other countries that would have to follow the example of the US. The price of bitcoin would rise exponentially, because who would want to sell bitcoin and receive dollars, a currency that the government is actively devaluing? Of course there is a dollar price that long-term bitcoin holders could sell at, but it wouldn’t be $100,000. This argument makes sense, but I still don’t think the US government will make a massive pivot toward bitcoin. “I think politicians would prefer to spend the new dollars on things for the population and ensure their victory in the next elections.”

Arthur Hayes, former CEO of BitMEX.

Hayes’ perspective is somewhat aligned with that of Cynthia Lummis. In November, the senator proposed selling part of the country’s gold reserves to buy BTC, with the aim of strengthening the reserves. Both approaches share the belief that Leading Digital Currency May Play Crucial Role in US Economic Restructuring

As Trump’s inauguration approaches, debate grows over the regulatory future of cryptocurrencies in the US. For example, the Federal Reserve maintains that there are legal and structural restrictions on integrating BTC into its reserves. Jerome Powell, Chairman of the FED, was clear when stating: “We are not allowed to own Bitcoin. The Federal Reserve Law establishes what we can have. This was reported by CriptoNoticias.