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The latest blog post, serial crypto entrepreneur and analyst Arthur Hayes predicted that a new injection of liquidity into the US economy following the inauguration of President-elect Donald Trump could fuel a Bitcoin (BTC) rally in Q1 2025.
Printing Money To Promote Bitcoin?
Despite surpassing $100,000 on January 6, BTC suffered a sharp drop to below $94,543 earlier today, casting doubt on the so-called “Trump rally” that many expected to last until Trump’s inauguration on January 20.
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The recent market action is in line with Hayes’ December forecast, where he did he warned of a possible “sad dump” in the cryptocurrency market near Trump’s inauguration. At the time, Hayes said the sell-off was due to perceived disappointment from the incoming Trump administration.
However, in his latest post, Hayes suggested that the US Federal Reserve’s (Fed) plan to inject a new economy of 612 billion dollars could cover the lack of regulatory progress and fuel new momentum for BTC. The founder of BitMex said:
Trump’s team’s reduction in his proposed crypto-crypto and pro-business legislation can be covered by the excellent condition of dollar purchases, which increased to $612 billion in the first quarter.
Hayes explained that the Fed is expected to increase money printing after Trump’s inauguration, which is likely to drive BTC and other digital assets higher in the area before the next pullback. He added that the market’s disappointment over the remaining crypto regulation under the Trump administration will increase the correction.
The crypto entrepreneur advised to sell in late Q1 2025 and wait for favorable liquidity conditions to return in Q3 2025. If new money enters the market, Hayes suggested that it will be time for risk-seeking investors to “turn the risk dial on degen. “
Opinion Split on BTC Price Action
While Hayes expects a rally in BTC later this quarter, other analysts and market analysts remain cautious. For example, a recent report by 10x Research noted that the Fed’s delay in cutting interest rates could dampen BTC’s momentum.
Similarly, technical analysis suggests that BTC may form a bearish head and shoulders pattern on the weekly chart, raising the fear of a pullback to $80,000. Yesterday’s failure to retrace the $100,000 price level further upset the bulls.
On the other hand, the CEO of Bitcoin mining MARA recently encouraged a long-term “invest and forget” strategy for BTC. He suggested that Bitcoin’s strategic destination in the US could spark a global race among nations to accumulate BTC, driving up its price.
Institutional interest in BTC is already on the rise, as seen in the entry of records accepted with US spot Bitcoin exchange-traded funds (ETF). At press time, BTC is trading at $95,154, down 3.6% in the last 24 hours.
Featured image from Unsplash, Chart from TradingView.com