As the cryptocurrency market continues to rally, Arthur Hayes, co-founder of BitMEX, has made an interesting prediction. Arthur asserts that Trump’s return to office could lead to a decline just as his previous actions have led to a rise in the cryptocurrency market.

“The market will immediately wake up to the fact that Trump has at best a year to enact any policy changes on or around January 20,” said Arthur Hayes. “This realization will lead to a massive selloff in cryptocurrencies and other Trump 2.0 stocks.”

Trump has one year to act because most elected US lawmakers will begin their campaigns in late 2025 in preparation for the US midterm elections in November 2026.

Some of you don't believe Trump is about to get rid of the dollar and print money. $BTC . Here's the#Bitcoinleader vs my new US Bank Credit Money Supply Index. The market is talking, listen up.

More explanation in my article "Black or White" which drops Tom. pic.twitter.com/wsSVUK0RH2 — Arthur Hayes (@CryptoHayes) November 10, 2024

Trump’s victory has raised expectations for a major shift in cryptocurrency legislation. That’s because the former dent promised to do “something great on crypto,” including creating a national strategic reserve of Bitcoin.

However, Arthur Hayes offers reasons why Trump's pledges may be unrealistic.

Limited Time for Trump to Focus on AOB-Like Cryptocurrencies

According to Maelstrom CIO, Trump has one year to show progress on some of his goals to help Republicans keep the House and Senate. Arthur said that the majority of elected lawmakers, including the entire House, will begin campaigning for the November 2026 midterm elections in late 2025.

Therefore, Trump was given one year to implement the policy changes.

“Fixing the fundamental domestic and international issues that negatively affect them will take even the smartest and most powerful politicians more than a decade, not just a year,” Hayes said.

The cryptocurrency industry is not one of Trump's top targets once he takes office.

Arthur Hayes questions the possibility of a Bitcoin strategic reserve

Hayes shared his thoughts that politicians would rather spend their newly created dollars on good things for the population to ensure their victory in the upcoming elections that will be held soon than spending it on Bitcoin.

He explained that the United States holds more gold than any other country. This shows that the United States is financially dependent on all other countries, both online and offline. Therefore, if the United States government devalues ​​gold to earn more dollars and then buys Bitcoin with some of those dollars, the value of Bitcoin will rise.

He also said: “The easy button is always the first thing politicians do. If the price of gold rises to $20,000 an ounce, how will that affect the prices of Bitcoin and other cryptocurrencies?

However, Arthur Hayes claimed that while he does not believe the US government will buy Bitcoin, his view remains that the price will continue to rise. He explained that ultimately, the depreciation of gold frees up dollars to spend on real goods, services, and financial assets.

Bitcoin has surged more than 50% since Trump’s victory, taking its price from around $68,000 to a record high of $108,135. However, Arthur Hayes’ prediction of a crypto market crash has further dampened sentiment, leading to a nearly 3% drop in the global crypto market cap to $3.64 trillion today.

Additionally, Dogecoin saw a drop of almost 4%, settling at $0.3845. Shiba Inu saw a drop of almost 5%, while Pepe saw a more significant decline of more than 7% in the past 24 hours.

It would be foolish to ignore the economic power that comes with China. China’s economy and the policies it has adopted have paved the way for the global economy to operate under it. During the “Sleepy Joe and Biden Economics” era, China, under the banner of BRICS, has grown to a position that should not worry America.

However, Arthur Hayes believes Xi Jinping has two big problems he needs to solve. Xi needs to create jobs for the more than 20% of unemployed educated youth, and prevent property prices from falling.

Will capital flight through the various legal channels in Macau (casinos) and Hong Kong (Hong Kong-registered companies run by Chinese owners) be allowed to operate normally, or will Xi Jinping close them down to trap capital at home?

Arthur Hayes

According to Arthur Hayes, “For crypto, at least in the short term, Chinese capital will flow through Hong Kong into dollars and buy Bitcoin and other cryptocurrencies. In the medium term, once Xi reciprocates and prevents Chinese capital from escaping through clear and liquid channels, the question is whether Hong Kong-based crypto ETFs will be allowed to accept southbound capital flows from mainland Chinese investors.”