The imminent swearing-in of Donald Trump as the President of the United States on January 20th has stirred up diverse opinions among analysts regarding Bitcoin [BTC].
Indeed, a recent report by Forbes suggested that the inauguration could potentially trigger a collapse in BTC prices due to what it perceives as the market’s ‘misguided’ valuation of the asset based on optimistic crypto-related policies that may not materialize.
Referencing K33 Research’s market forecast from December, the report highlighted,
“It is highly probable that the market has unrealistic expectations regarding the speed of policy adjustments and might overestimate the impact leading up to the inauguration.”
Is BTC in Danger of a Crash During Trump’s Inauguration?
This cautious standpoint was echoed by Arthur Hayes, the Co-founder of BitMEX and a prominent figure in the crypto investment sphere. In his December newsletter, Hayes cautioned about a potential significant sell-off around the time of the inauguration. He remarked,
“I anticipate a turbulent downturn in the cryptocurrency markets on Trump’s inauguration day in January 20, 2025.”
Moreover, considering historical trends, January historically has not been a favorable month for BTC. If history repeats itself, BTC might face some short-term risks.
Nevertheless, a sector of the community remains optimistic about significant policy shifts, such as the establishment of a strategic reserve for BTC. Notably, the BTC reserve could serve as the primary driver of BTC’s price movements in 2025.
That said, the Coinbase Premium Index indicated that the selling pressure in December has spilled over into the early months of 2025.
Typically, BTC’s recovery aligns with heightened demand from Coinbase, particularly U.S. investors. Hence, the subdued demand currently suggests that a BTC recovery might not be imminent, at least for now.