The crypto market experienced a sharp downturn following US President Donald Trump's announcement of a strategic crypto reserve.
Current Market Situation
The cryptocurrency market saw a significant drop. Bitcoin fell by more than 10%, and the overall crypto market capitalization dropped below $2.8 trillion.
Trump's Economic Strategy
Former BitMEX CEO Arthur Hayes argues that Trump's economic strategy could significantly impact the cryptocurrency market. According to Hayes, Trump's approach to financing 'America First' policies involves massive debt issuance, requiring the Federal Reserve to increase money supply and lower interest rates. Such conditions have historically been favorable for Bitcoin.
Bitcoin's Forecast
Arthur Hayes believes aggressive monetary expansion could be bullish for Bitcoin. He estimates that liquidity injections ranging from $2.74 trillion to $3.24 trillion could trigger a substantial rally for Bitcoin. Although the current prediction is more conservative, the price could reach $1 million during Trump's presidency.
Despite the recent downturn, analysts like Arthur Hayes remain optimistic about Bitcoin's potential under the economic strategy of the Trump administration.
