Analysts expect that the event on January 20 will be mostly ceremonial, and not market-moving.
Market experts are assessing whether Donald Trump’s inauguration will cause any major price changes for digital assets. Before the unexpected launch of Solana based TRUM official meme coin, industry experts expressed conservative views.
Following the Republican victory over the Democratic, digital assets such as Solana Bitcoin and XRP have seen impressive gains. The crypto market is already pricing the inauguration, according to experts.
The Swearing In Event: Minimal movement
Ruslan Linkha, YouHodler’s head of markets and the chief executive in charge of Markets at YouHodler has said that there will be no breakouts for prices on Monday 20th January. Executive added that Monday’s event is already priced because it will be a largely ceremonial affair and won’t have a market impact.
Some observers believe that major tokens could pull a “sell-the-news” as Bitcoin surged to a new high in the hours leading up to Trump’s Inauguration. Anndy Lian is an intergovernmental blockchain expert who believes that the market has already priced the positive CPI figures. The author of the cryptocurrency rules out Trump’s inauguration and any policies which would immediately change the game. Short-term traders are expected to pull back as they take their profits.
Arthur Hayes, former BitMex chief and conservative voice of reason, has issued a series of stark warnings. The co-founder of the crypto exchange warned that BTC might experience a violent sell-off following Trump’s return in the Oval Office.
Swarm Executive Philipp Pieper was not quite as pessimistic, but he did indicate that there is little new information to be gained from the inaugural event. He said that the price movements from Monday’s event are often a result of noise.
The traders are confident that Trump’s early pronouncements will change the situation. Simon Peters, eToro’s market director admitted that he was closely following the Trump Administration implementations.
Price increases are largely due to political and legal developments
Peters noted that Trump had recently criticized the high interest rates in a statement. This suggests that the new President may push for a reduction in interest rates. The loosening of financial conditions is the necessary boost to the prices of crypto assets.
Analysts believe that this year, the digital asset market will be boosted by executive orders related to cryptography.
Pieper said that crypto prices will rise as the regulations are clarified and the market takes advantage of the updates Trump’s administration is bringing.
Pieper predicts that legislative and regulatory developments are likely to combine in a way that will reinforce macroeconomic indicators. This is especially true for US inflation. Inflation and rate sensitivities are important market liquidity and money-supply influencers, he added. A rise in asset price would be triggered by the maintenance of increased liquidity.
Do Trump policies have a zero-sum game?
Although the crypto-friendly macroeconomic policies and pro-crypto position present the opportunity for price increases, certain policies may indirectly harm the industry.
Ruslan Lin from Youhodler suggests that increased trade wars, new tariffs or both could keep inflation high. This could put downward pressure on all financial systems.
It is important to not expect major changes from Monday’s event. For the market to react to reality, it is important that the new administration implements its promises.
A number of tokens with smaller caps, including meme coins based on political themes, could be vulnerable to volatile trading after the Monday event. Lienkha said that MAGA tokens and DOGE coins could rise as they’re subject to emotion trading, not substance factors.
Pieper says that smaller tokens can easily fall when they are faced with low levels of liquidity. Pieper explained that tokens with a high sentimental value could be affected by the problem. The tokens have extreme volatility, and it is difficult to determine their underlying value.
Editorial credit: Jonah Elkowitz / Shutterstock.com
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: e-cryptonews.com
