What nonsense, whether there is Trump or not, Bitcoin will rise or fall as it will.

Market 'Delusion' Warning: Will Trump's Inauguration Cause a BTC Collapse?

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Analysts warn that Donald Trump's presidential inauguration on January 20, 2025, could negatively impact the Bitcoin (BTC) market. Overly optimistic expectations for pro-crypto policies and weak demand may lead to a significant adjustment in BTC in the short term.

'Delusion' and Policy Overestimation

According to Forbes, the market has unrealistic expectations regarding the pro-crypto policies that the Trump administration may implement. K33 Research's market outlook states, 'The market may misjudge the speed of policy changes while overestimating the impact before and after the inauguration.'

This misconception could trigger asset repricing and further exacerbate volatility.

Analysts' Concerns

Cryptocurrency investor and BitMEX co-founder Arthur Hayes also expressed similar views. In a December newsletter, he stated bluntly, 'I believe the crypto market will experience a painful collapse on the day of Trump's inauguration.'

Additionally, historical seasonal data shows that January is not a strong month for Bitcoin performance, further increasing potential market risks.

Signals from the Coinbase Premium Index

The Coinbase Premium Index recently dropped to its lowest level of the year, indicating weak demand from U.S. investors. This decline in demand is typically associated with selling pressure, which may hinder BTC's short-term rebound.

Although some in the community are optimistic about policies such as building a Bitcoin strategic reserve, the weak market demand suggests that a rebound is not yet guaranteed.

Summary and Outlook

The policy uncertainty brought by Trump's inauguration, coupled with low market sentiment, may lead to downward pressure on BTC in the short term. However, in the long run, if policies can provide actual support, the crypto market may still welcome new growth opportunities. Investors need to be cautious of short-term volatility and maintain a rational response.

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