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- Historical market performance data suggests that the cryptocurrency market’s upward momentum may decline after President-elect Donald Trump’s inauguration in January 2025.
- Analysts are divided on Bitcoin’s future, with some foreseeing a potential 30% correction post-inauguration before a bullish trend resumes.
Recent market data indicates that the cryptocurrency sector may be approaching a peak as anticipation builds around Trump’s inauguration. Trump’s win during the elections saw a bullish push in digital assets like Dogecoin (DOGE) and Solana (SOL); this raises questions about whether a similar occurrence might take place once he is inaugurated on January 20, 2025.
Historical trends reveal that both the stock market and cryptocurrencies show strong performance in the weeks leading up to and immediately following a presidential election. Take, for instance, Tesla (TSLA) stock; JPMorgan (JPM) shares surged by 14% and 9%, respectively, post-election. The ripple effect touched on crypto, propelling Bitcoin to its all-time high of $99,834, the highest price Bitcoin has paid since it was launched in 2009.
Market Psychology and Speculations
The observed market behavior is particularly pronounced when the incoming president is a member of the Republican Party. Research from TS Lombard, formerly known as Lombard Street Research, underscores that the Republican Party is generally viewed as more pro-business, with policies and initiatives that supporters believe stimulate economic growth. As a result, this party affiliation tends to generate increased post-election enthusiasm among investors.
Scott Chronert, a U.S. equity strategist at Citi, provided insights in a November report, suggesting that investors should tactically reconsider their positions during a post-election rally. He noted that if the S&P 500 were to exceed 6,100 by the end of the year, a target that implies approximately a 5% increase from election day, investors might want to leverage that moment for profit-taking.
This advice exemplifies the importance of timing in investment strategies, especially during periods of market volatility. Strong beginnings, like that of 2024, result in positive year-end performance for markets. Adam Parker from Trivariate Research supports this, emphasizing that since 1943, markets have remained strong in November and December after achieving gains of 20% or more in the first ten months.
Analysts Predict that the Crypto Market Will Slowdown After Trump’s Inauguration
Adam Parker has pointed out that a notable market correction could be on the horizon, with a potential “sell the inauguration” consensus gaining traction. Bitcoin may face a decline of 20-30% before it can surpass the $100,000 milestone. Concerns for 2025, such as tariffs and unstable trading relationships, along with fewer expected interest rate cuts, could hamper growth despite the possibility of advantages from lower taxes and less regulation.
Adding to this perspective, Ryan Lee, the chief analyst at Bitget Research, notes that Bitcoin’s price might drop by as much as 30%, which could bring it down to around $70,000 before it resumes its upward movement. Nevertheless, the long-term outlook appears promising, supported by increasing institutional interest and historical trends that indicate the recovery is feasible.
Currently, Bitcoin (BTC) is priced at $95,577, reflecting a slight decline of 0.49% over the past 24 hours while showing a gain of 1.85% over the week. As we look ahead to January, when Trump resumes office, and Gary Gensler could be out, potentially paving the way for crypto-friendly regulations, we will have to wait and see whether these anticipated corrections will unfold.
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