Minimal Movement from Swearing-in Event
Crypto analysts predict that the upcoming inauguration event on January 20 will primarily be ceremonial and unlikely to have a significant impact on the market. The anticipation surrounding Donald Trump’s swearing-in has sparked discussions among market experts regarding its potential effects on the prices of major digital assets. Analysts expressed a conservative outlook, particularly in light of the recent launch of the Solana-based TRUM meme coin.
Market Sentiment and Price Gains
Established digital assets like Solana, Bitcoin, and XRP have enjoyed considerable gains following the Republican victory over the Democrats. Experts attribute this upward trend to the fact that the crypto market has largely priced in the inauguration event already. Ruslan Lienkha, CEO at YouHodler, stated that he does not foresee any breakout price movements on January 20, emphasizing the event’s ceremonial nature.
Sell-the-News Potential
Some analysts suggest that major tokens might experience a “sell-the-news” phenomenon, particularly with Bitcoin reaching new highs ahead of Trump’s inauguration. Anndy Lian, a blockchain expert, believes that the market has already accounted for positive CPI data, and he does not expect the inauguration to introduce any significant policies that could alter the market dynamics. Short-term traders may take profits, leading to potential pullbacks.
Political and Legal Development Key to Higher Prices
The conservative outlook aligns with the warnings from Arthur Hayes, former chief of BitMex, who cautioned against a potential sell-off of Bitcoin following Trump’s return to the Oval Office. Swarm executive Philipp Pieper shared a similar sentiment, noting that the inauguration is unlikely to provide the market with new information. Any price fluctuations resulting from the event are expected to be temporary noise rather than meaningful shifts.
Future Expectations
Despite the cautious stance towards the inauguration, analysts believe that the market could respond positively once Trump begins to implement policies. eToro market executive Simon Peters highlighted the importance of monitoring the new administration’s actions, particularly in light of Trump’s recent comments about higher interest rates, which may suggest a push for lower rates that could benefit crypto assets.
Inflation and Market Liquidity
Analysts noted that the delivery of anticipated crypto-related executive orders could lead to a positive trajectory for digital assets this year. Pieper envisions a general increase in crypto prices driven by clearer regulations and tangible updates from the Trump administration. He pointed out that regulatory and legislative developments could significantly impact macroeconomic indicators, especially US inflation, which in turn influences market liquidity and money supply.
Are Trump Policies a Zero-sum Game?
While the pro-crypto stance of the new administration presents potential opportunities for price rallies, some policies may inadvertently hinder the industry. Youhodler’s Ruslan Lien warned that intensified trade wars and new tariffs could exacerbate inflation, negatively impacting the broader financial ecosystem. Such potential adverse outcomes warrant caution against expecting major price movements from the inauguration event.
Vulnerability of Smaller-cap Tokens
The inauguration event may also leave smaller-cap tokens susceptible to volatility, especially politically-themed meme coins. Lienkha noted that tokens like MAGA and DOGE are often driven by emotional trading rather than substantive factors, making them vulnerable to sudden price swings. Pieper cautioned that smaller-cap tokens could face significant declines when liquidity is low, as they tend to be sentiment-driven and difficult to value accurately.
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