Donald Trump’s January 20th Inauguration: Will Bitcoin Face a “Sell the News” Moment? Analysts Reevaluate
As Donald Trump’s inauguration on January 20th approaches, analysts are revisiting predictions about its potential impact on Bitcoin. While Trump’s pro-crypto stance initially fueled a rally in BTC prices, macroeconomic challenges have tempered expectations, leading K33 analysts Vetle Lunde and David Zimmerman to reconsider their earlier projection of a “sell the news” scenario.
Bitcoin’s Rally: Euphoria Meets Reality
Following Trump’s victory in the U.S. presidential election, Bitcoin surged to an all-time high of over $108,000 in December 2024. This rally was driven by market optimism over Trump’s campaign promises, including crypto-friendly policies and tax cuts. However, macroeconomic pressures soon reversed the trend, with Bitcoin falling nearly 18% to around $89,000 as of Monday.
K33 analysts originally posited that the inauguration could mark a point of profit-taking for traders. However, in their latest report, they noted, “Selling Bitcoin on the inauguration is far less attractive unless renewed momentum emerges in the coming days.”
Competing Forces Impacting Bitcoin
The report highlighted several conflicting market dynamics influencing Bitcoin’s price:
- Inflationary Pressures: Trump’s tariff rhetoric has added uncertainty, potentially stoking inflation concerns.
- Stronger U.S. Dollar: Rising yields on 10-year Treasury notes and a robust dollar have dampened Bitcoin’s appeal.
- Diminished Fed Rate Cut Expectations: A cautious economic outlook has curbed market enthusiasm for risk assets.
Despite these factors, Trump’s anticipated policies—tax cuts, deregulation, and favorable crypto regulations—are expected to provide support for Bitcoin and other risk assets over the long term.
Shift in Strategy: From Short-Term Caution to Long-Term Optimism
K33 analysts acknowledged the market’s transition from post-election euphoria to conservatism, stating, “The market was driven by Trump enthusiasm in November until mid-December, but since then, caution has taken over.” This shift has made the idea of a “sell the news” event on inauguration day less compelling.
The analysts reiterated their long-term bullish outlook for Bitcoin during Trump’s presidency, citing his emphasis on economic performance and market growth. Trump’s pro-business policies could provide a favorable backdrop for BTC and other digital assets to thrive.
Outlook for Bitcoin Under Trump’s Administration
While short-term volatility has defined Bitcoin’s recent performance, K33’s report underscores optimism for its long-term prospects. With Trump likely to revive his rhetoric on economic success and market growth, Bitcoin could benefit from a renewed focus on crypto-friendly policies and deregulation.
As January 20th draws closer, investors are watching closely for signals of renewed momentum in the crypto market. Whether Bitcoin experiences a “sell the news” event or rallies in response to Trump’s inauguration remains to be seen, but the broader outlook for BTC during his presidency appears promising.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
