Key Points
- Analysts predict a potential Bitcoin crash around the time of Trump’s inauguration.
- The Coinbase Premium Index has hit record yearly lows, suggesting weak market demand.
The upcoming inauguration of Donald Trump on 20 January has stirred mixed sentiments among Bitcoin analysts.
Some, as reported by Forbes, suggest that the event could lead to a Bitcoin crash as the market has overestimated the asset’s value based on potential pro-crypto policies that may not come to fruition.
Market Expectations and Potential Risks
These views are echoed by BitMEX Co-founder and crypto investor Arthur Hayes, who anticipates a significant sell-off around the inauguration.
Historically, January has proven to be a challenging month for Bitcoin, which could add to the potential risk.
However, some believe that key policy changes, such as the creation of a Bitcoin strategic reserve, could drive Bitcoin’s price action in 2025.
Weak Demand Indicated by Coinbase Premium Index
The Coinbase Premium Index shows that December’s sell pressure has extended into early 2025, indicating weak demand for Bitcoin.
In most instances, a Bitcoin rebound is associated with strong demand from Coinbase, suggesting that a rebound may not be imminent.
Despite these predictions, it’s crucial to note that market conditions are subject to rapid change and unpredictable factors.
