Monday’s inauguration of Donald Trump isn’t likely to bring any significant price moves for major cryptocurrencies, according to industry experts who spoke to Decrypt before Friday night's surprise drop of an official Trump meme coin.
Well-established coins such as Bitcoin, Solana, and XRP have risen considerably since the Republican’s election victory on November 5, leading some experts to suggest that the market has already priced in the inauguration.
“I do not anticipate any significant movements on Monday,” YouHodler’s chief of markets Ruslan Lienkha, told Decrypt.
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“The event appears to be already priced in, and the inauguration is mainly ceremonial rather than market-moving,” he added.
Some observers also highlight the possibility of a “sell-the-news” day for major tokens, with Bitcoin having already gained strongly in the runup to Trump’s swearing in.
“With [positive] CPI data already priced in and Trump’s inauguration unlikely to introduce any immediate, game-changing policies for crypto, Monday could see a pullback as short-term traders lock in gains,” suggests Anndy Lian, an intergovernmental blockchain advisor and cryptocurrency author.
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This suggestion resonates with starker warnings given by figures such as BitMex co-founder Arthur Hayes, who predicted last month that Bitcoin may suffer a “vicious sell-off” when Trump takes office.
While not as pessimistic as Hayes, Swarm co-founder Philipp Pieper tells Decrypt that the inauguration itself doesn’t provide the market with any new information.
“It's really important to underline here that any price movement on Monday is going to be mostly noise in the bigger picture,” he explained.
But this picture could change as soon as Trump and his administration gets to work, with traders waiting to see whether the current President-elect will live up to earlier pronouncements.
“I’m more closely focused on what he (and his administration) will implement over the next few months,” eToro market analyst Simon Peters told Decrypt.
Peters notes that Trump complained at a recent press conference that interest rates are “far too high,” suggesting that the incoming President may push to lower them.
“A loosening of financial conditions under his administration could provide a tailwind for crypto-asset prices,” Peters adds.
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And assuming that recent reports of crypto-related executive orders are accurate, analysts are relatively confident that the general trajectory of the market this year will be upwards.
Pieper explained: “As the regulatory environment becomes clearer and the market grasps tangible updates for the first year of the Trump administration, we’re likely to see a general uplift in prices.”
Legislative and regulatory moves are also likely to combine with tentatively improving macroeconomic indicators, such as US inflation.
“Inflation and rate sensitivity matters because it ultimately has a major say in the outlook for money supply and market liquidity,” said Pieper. “The more liquidity in the market, the more it will raise asset prices.”
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Yet while the arrival of both crypto-friendly macroeconomics and presidents should point towards generally rising prices, some analysts warn that some of Donald Trump’s other economic policies could indirectly bite the cryptocurrency market.
“Other policies, such as the potential intensification of trade wars and the imposition of new tariffs, could sustain elevated inflation levels and exert downward pressure on financial markets,” warns Youhodler’s Ruslan Lienkha.
This is perhaps why it would be premature to expect major moves on Monday, since the market will need the new administration to act before it can begin differentiating perceptions from reality.
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On the other hand, Monday may expose smaller cap tokens and (politically themed) meme coins to a greater degree of volatility.
“For instance, tokens like MAGA or DOGE [Department of Government Efficiency] may stage a rally, influenced by emotional trading rather than substantive factors,” Lienkha suggested.
However, Phillipp Pieper cautions that they may just as easily crash, in view of their low liquidity.
“The issue with these kinds of token is they’re largely sentiment-driven which can be extremely volatile and difficult to underpin the inherent value,” he said.
Edited by Stacy Elliott.
