US Fed and Trump Administration Set to Influence Bitcoin’s Price in Q1 2025, Says Hayes

• Bitcoin price can benefit from a liquidity pump, which will counter the potential negative effects of delayed crypto regulations under President-elect Trump’s administration.
• With key events such as the US CPI, FOMC meeting, and Trump’s inauguration, the crypto market could experience significant volatility ahead.

BitMEX co-founder Arthur Hayes recently published a blog post explaining how Bitcoin (BTC) could benefit from the massive $612 billion liquidity infusion during the first quarter of 2025. This could also mitigate investor concerns regarding the delayed crypto regulations in the United States he added.

With key events like US CPI, FOMC meeting, and President-elect Donald Trump’s January 20 inauguration, the crypto market could witness strong volatility moving ahead. However, delays in crypto regulation could weigh on investor sentiment and potentially lower valuations.

However, Arthur Hayes believes that the impact of regulatory setbacks may be offset by the injection of $612 billion in new liquidity into the US Treasury by March 2025. In his blog post earlier on Tuesday, January 7, he wrote:

A letdown by team Trump on his proposed pro-crypto and pro-business legislation can be covered by an extremely positive dollar liquidity environment, an increase of up to $612 billion in the first quarter.

Arthur Hayes anticipates a surge in money printing following Trump’s inauguration and expects Bitcoin price to hit a local peak in March before a potential correction. He said that the expected downturn will happen with investor disappointment over delayed crypto policy advancements under the Trump administration.

Last month in December, Hayes said:

The market will instantly wake up to the reality that Trump has at best one year to enact any policy changes on or around January 20th. This realization will lead to a vicious sell-off in crypto and other Trump 2.0 equity trades.

Bitcoin Price Volatility and Expectations Ahead

Since the beginning of 2025, the Bitcoin price has been seeing strong volatility and is down by over 3.5% in the last 24 hours slipping under $95,000 levels once again. The altcoin market correction seems to be even more severe at the moment. Some market analysts link the current Bitcoin price correction to the lack of institutional activity during the holiday season.

But as per Binance Research, institutional investors often redeploy capital at the start of the new year, and this “liquidity boost” could propel Bitcoin past $100,000 ahead of Trump’s January 20 inauguration, per the CNF report. It noted:

While it is possible for BTC to recapture $100K ahead of the Trump inauguration on expectations of positive crypto regulation, the market will need to see continued supportive conditions to maintain such levels.

Considering the macro data release ahead this month, it will be interesting to see whether the bulls can sustain these levels. Big players like MicroStrategy and Metaplanet continue to accumulate BTC in big quantities. KULR Technology Group, listed on the New York Stock Exchange, forecasted that Bitcoin will exceed $200,000 in 2025 after purchasing the dip at $97,000.