Donald Trump’s inauguration on Monday is unlikely to lead to significant price movements for major cryptocurrencies, according to industry experts who spoke with Decrypt before the surprise drop, Friday evening, of an official Trump coin.
Established coins such as Bitcoin, Solana and XRP have risen significantly since the Republican’s election victory on November 5, leading some experts to suggest that the market has already priced in the inauguration.
“I don’t expect any significant movement on Monday,” said Ruslan Lienkha, YouHodler’s head of markets. Decrypt.
“The event already seems priced in, and the inauguration is primarily ceremonial rather than market-driven,” he added.
Some observers are also pointing to the possibility of a “news sell-off” day for major tokens, with Bitcoin already rising sharply in the run-up to Trump’s inauguration.
“With (positive) CPI data already priced in and Trump’s inauguration unlikely to usher in immediate, game-changing policies for crypto, Monday could see a pullback as short-term traders lock in gains,” suggests Anndy Lian, intergovernmental blockchain advisor and cryptocurrency author.
The suggestion echoes harsher warnings given by figures such as BitMex co-founder Arthur Hayes, who predicted last month that Bitcoin could suffer a “brutal sell-off” when Trump takes office.
While not as pessimistic as Hayes, Swarm co-founder Philipp Pieper tells Decrypt that the inauguration itself does not bring any new information to the market.
“It’s really important to emphasize here that any price movement on Monday will be mostly noise overall,” he explained.
But that situation could change as soon as Trump and his administration get down to business, with traders waiting to see if the current president-elect will live up to his previous statements.
“I’m more focused on what he (and his administration) will implement over the next few months,” said Simon Peters, market analyst at eToro. Decrypt.
Peters notes that Trump complained at a recent news conference that interest rates are “way too high,” suggesting the new president may push to lower them.
“An easing of financial conditions under his administration could provide a tailwind for crypto-asset prices,” adds Peters.
And assuming recent reports on crypto-related executive orders are accurate, analysts are relatively confident that the overall market trajectory this year will be upward.
Pieper explained: “As the regulatory environment becomes clearer and the market understands the tangible updates for the first year of the Trump administration, we will likely see a general increase in prices. »
Legislative and regulatory measures should also be combined with a modest improvement in macroeconomic indicators, such as inflation in the United States.
“Inflation and rate sensitivity are important because they ultimately have a major say in the outlook for money supply and market liquidity,” Pieper said. “The more liquid the market is, the more asset prices will rise. »
Yet even though the arrival of crypto-friendly macroeconomics and presidents should indicate a general rise in prices, some analysts warn that some of Donald Trump’s other economic policies could indirectly bite the cryptocurrency market.
“Other policies, such as potentially intensifying trade wars and imposing new tariffs, could keep inflation levels high and put downward pressure on financial markets,” warns Ruslan Lienkha of Youhodler.
This may be why it would be premature to expect any major moves on Monday, since the market will need the new administration to act before it can begin to separate perceptions from reality.
On the other hand, Monday could expose smaller cap tokens and meme (politically themed) coins to a greater degree of volatility.
“For example, tokens like MAGA or DOGE (Department of Government Efficiency) can stage a rally, influenced by emotional trading rather than substantive factors,” Lienkha suggested.
However, Phillipp Pieper warns that they could just as easily collapse, given their low liquidity.
“The problem with these types of tokens is that they are largely sentiment-driven, which can be extremely volatile and difficult to substantiate their inherent value,” he said.
Edited by Stacy Elliott.
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