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Recently Blog Then, serial entrepreneur and cryptocurrency commentator Arthur Hayes predicted that the injection of new liquidity into the US economy after the inauguration of President-elect Donald Trump could lead to a rise in the price of Bitcoin (BTC) in the first quarter of 2025.
Print money to pay bitcoin?
Despite rising above $100,000 on January 6, Bitcoin faced a sharp decline to a low of $94,543 earlier in the day, casting doubt on the so-called “Trump rally” that many expected would continue until… Trump’s inauguration on January 20.
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The recent market movement is consistent with Hayes’ December forecast, in which he said: to caution Of a potential “horrific dump” in the cryptocurrency market around Trump’s inauguration. At the time, Hayes attributed this expected sell-off to perceived regulatory disappointments from the incoming Trump administration.
However, in his latest article, Hayes suggested that the US Federal Reserve’s plan to inject $612 billion of new liquidity into the economy could make up for the lack of regulatory progress and ignite new bullish momentum for Bitcoin. BitMex co-founder said:
Team Trump’s disappointment with his proposed pro-crypto, pro-business legislation could be covered by a very positive dollar liquidity environment, up to $612 billion in the first quarter.
Hayes explained that the Fed is expected to ramp up money printing after Trump’s inauguration, potentially pushing Bitcoin and other digital assets to a local peak before a subsequent decline. He added that market disappointment over delayed cryptocurrency regulation under the Trump administration would exacerbate the correction.
The cryptocurrency entrepreneur advised selling at the end of the first quarter of 2025 and waiting for favorable liquidity conditions to return in the third quarter of 2025. Once new liquidity enters the market, Hayes suggested that it is time for risk-seeking investors to “shift the risk profile lower.” “
Opinions are divided on BTC’s price action
While Hayes expects Bitcoin to rise later this quarter, other analysts and market commentators remain cautious. For example, a recent report by 10x Research male The Fed’s delay in cutting interest rates could dampen Bitcoin’s bullish momentum.
Likewise, technical analysis suggests BTC may form a bearish head and shoulders pattern on the weekly chart, raising fears of a pullback to as low as $80,000. Yesterday’s failure to decisively reclaim the $100,000 price level further destabilized the bulls.
On the other hand, the CEO of Bitcoin mining company MARA recently stated He called Long-term “invest and forget” strategy for BTC. He noted that the US Strategic Bitcoin Reserve could spark a global race between countries to accumulate Bitcoin, causing its price to rise.
Institutional interest in BTC is actually On the rise, as evidenced by record flows receive Through US exchange-traded funds (ETF). At press time, Bitcoin is trading at $95,154, down 3.6% over the past 24 hours.
Featured image from Unsplash, chart from TradingView.com