Will Donald Trump's Inauguration Ceremony on January 20th Turn into a "Sell the News" Event for Bitcoin? Analysis Firm Changed Its Mind

After Donald Trump won the US presidential elections, Bitcoin's rapid rise towards all-time highs softened due to macroeconomic barriers, prompting K33 analysts to re-evaluate their previous predictions that the inauguration ceremony on January 20th would trigger a 'sell the news' event.

K33 analysts Vetle Lunde and David Zimmerman previously suggested that Bitcoin's rally fueled by Trump's pro-cryptocurrency election campaign promises would face a reality test with the expectations of Washington's political processes slowing down. However, analysts noted in today's reports that the sell-off news became less attractive as the inauguration approached.

The report highlighted competing market forces such as the inflationary impact of Trump's tariff rhetoric, expected tax cuts, and favorable crypto policies that could provide potential support to risk assets.

"November's euphoria came and went, with the S&P 500 closing its post-election gap and Bitcoin hitting two-month lows," the analysts wrote, adding: "Our monthly outlook was for a sell-to-read event at the inauguration, but we restate this strategy that it will be much less attractive to sell Bitcoin at the inauguration unless there is renewed momentum in the coming days."

After peaking just above $108,000 on December 17, Bitcoin fell to around $89,000 on Monday, a drop of approximately 18%. This decline was driven by macroeconomic pressures such as rising yields on 10-year Treasury bonds, a stronger US dollar, and increasing inflation expectations, which reduced expectations of interest rate cuts by the Fed.

Analysts said, "The market moved with Trump enthusiasm from November to mid-December, but since then conservatism and caution have prevailed."

Despite short-term fluctuations, K33 maintains a long-term bullish view on Bitcoin during Trump's presidency. In his first term, Trump frequently referred to stock market performance as an indicator of economic success, citing policies such as tax cuts, deregulation, and trade agreements. Analysts expect this rhetoric to resurface and potentially benefit Bitcoin and other risk assets.

The report signaled optimism for BTC, stating, "We maintain our long-term bullish expectations for the impact of Trump on Bitcoin" with the arrival of the new administration.