Arthur Hayes warns that Monad’s token structure, with its high fully diluted value and low circulating supply, makes it prone to a 99% selloff, labeling it a venture capital-driven project lacking real adoption.
High FDV projects like Monad often see initial price surges followed by sharp declines as insider tokens unlock.
Hayes predicts only a few layer-1 blockchains, including Bitcoin, Ethereum, Solana, and Zcash, will endure long-term.
Despite Monad concerns, Hayes forecasts a major crypto bull run fueled by global money printing, with privacy coins gaining prominence; Zcash holds a key spot in his portfolio.
Arthur Hayes issues stark Monad warning amid bullish crypto outlook: money printing to drive next rally. Discover risks and opportunities in layer-1 tokens today.
What is Arthur Hayes’ Warning on Monad?
Arthur Hayes, the renowned crypto veteran and former BitMEX CEO, has cautioned that the newly launched layer-1 blockchain Monad faces significant risks due to its token structure. He describes it as a high fully diluted value (FDV) project with low circulating supply, which typically leads to early hype-driven price pumps followed by devastating selloffs. Hayes believes this setup, common in venture capital-backed coins, prioritizes insider gains over sustainable adoption, potentially resulting in a 99% value drop.
How Does Monad’s Token Structure Expose Retail Investors?
Monad’s MON token launched with an airdrop, sparking a 40% price increase since its debut earlier this month. However, Hayes points out the dangers of its economic model: a substantial gap between FDV and circulating supply creates artificial scarcity initially, attracting retail traders. As venture capital unlocks occur, floods of tokens enter the market, triggering selloffs. According to data from market trackers, similar high-FDV projects have historically lost over 90% of their value post-launch. Hayes emphasized on a recent discussion, “It’s going to be another bear chain,” highlighting that without genuine use cases, such networks fade into obscurity. He contrasts this with established protocols like Bitcoin and Ethereum, which have proven resilience through real-world utility and community support. Expert analyses from blockchain researchers underscore that projects raising large sums—Monad secured $225 million from Paradigm last year—often prioritize rapid scaling over balanced tokenomics, leaving retail investors vulnerable to volatility.
Frequently Asked Questions
What Layer-1 Blockchains Does Arthur Hayes Expect to Survive?
Arthur Hayes identifies Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Zcash (ZEC) as the layer-1 networks poised for long-term success. These protocols have demonstrated robust adoption, technological maturity, and resistance to market cycles, unlike many newcomers reliant on hype. Hayes argues that only a handful will thrive amid competition from thousands of emerging chains.
Why Does Arthur Hayes Predict a Crypto Bull Run from Money Printing?
Governments, especially the United States, are gearing up for liquidity injections to counter economic slowdowns and support political initiatives, according to Hayes. This monetary expansion will inject fresh capital into risk assets like cryptocurrencies. He views Bitcoin as a leading indicator of global liquidity trends, signaling the start of a major rally ahead, independent of traditional four-year halving cycles.
Key Takeaways
- Monad’s High-Risk Token Model: High FDV and low float invite short-term gains but long-term losses for retail; Hayes calls it VC hype without substance.
- Bullish Macro Outlook: Expect massive money printing to propel crypto prices, with Bitcoin acting as the global financial system’s early warning signal.
- Privacy Focus Ahead: Hayes bets on zero-knowledge tech and privacy coins like Zcash dominating narratives, urging investors to prioritize utility over speculation.
Conclusion
In summary, Arthur Hayes’ Monad warning highlights the pitfalls of imbalanced token structures in new layer-1 blockchains, while his broader crypto predictions paint an optimistic picture driven by impending monetary expansion and the rise of privacy technologies. As the market evolves, investors should focus on established assets like Bitcoin, Ethereum, Solana, and Zcash for stability. Stay informed on these dynamics to navigate the next bull cycle effectively and capitalize on emerging opportunities in tokenized finance and stablecoins.
Arthur Hayes warns Monad’s token structure risks 99% selloff, yet predicts money printing will ignite crypto rally with privacy coins leading. Explore expert insights.
Crypto veteran Arthur Hayes has issued a stark warning about Monad, the recently launched layer-1 blockchain, predicting it could plummet up to 99% due to its venture capital-fueled structure lacking genuine adoption.
In a discussion featured on Altcoin Daily, Hayes characterized the project as “another high FDV, low-float VC coin.” FDV, or fully diluted value, represents the total market capitalization if all tokens were circulating, and a wide disparity with actual supply often signals trouble for retail participants.
Hayes explained that such projects typically enjoy early enthusiasm and price surges, only to face brutal corrections when locked tokens from insiders and VCs become available. “It’s going to be another bear chain,” he stated, noting that initial pumps do not guarantee enduring utility or user base growth.
Reflecting on the broader landscape, Hayes asserted that the majority of new layer-1 networks will fail, with survival limited to a select few. He specifically highlighted Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Zcash (ZEC) as protocols likely to maintain relevance through the upcoming market cycle, based on their proven track records in scalability, security, and innovation.
Monad, which raised $225 million from Paradigm last year, officially went live this week with an airdrop of its MON token, contributing to its 40% price rise since inception.
Monad’s MON token up 40% since launch. Source: CoinMarketCap
Related: Did Bitcoin bottom? Arthur Hayes Thinks $80,000 Will Hold
Hayes Remains Bullish on Crypto Overall
Contrasting his Monad critique, Hayes expressed strong optimism for the cryptocurrency sector, attributing future growth primarily to expansive monetary policies. He believes governments, led by the United States, are on the cusp of injecting significant liquidity to address decelerating economic growth and upcoming elections.
“I think that we are at the end of the beginning of this cycle and the massive amounts of crazy bull market money printing is ahead of us,” Hayes remarked, emphasizing the role of fiscal stimulus in driving asset appreciation.
He challenged the conventional four-year Bitcoin halving cycle theory, arguing that historical bull markets stemmed from worldwide credit booms orchestrated by the US and China, not supply reductions alone. When liquidity contracts, Bitcoin serves as the “last free-market smoke alarm” for the financial system, Hayes noted, reacting swiftly to macroeconomic shifts.
Related: Arthur Hayes: Bitcoin’s Four-Year Cycle Is Dead
Privacy Coins Poised for Dominance
Hayes forecasted that privacy-enhancing technologies will shape the next crypto era, with zero-knowledge proofs and dedicated privacy coins attracting substantial interest. Institutional players, he suggested, will increasingly adopt Ethereum for applications like stablecoins and tokenized real-world assets.
Earlier this month, Hayes disclosed that Zcash ranks as the second-largest holding in his family office, Maelstrom, just behind Bitcoin, underscoring his conviction in privacy-focused innovations.
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