Following the spectacular launch of Monad, which surged over 80% post-debut, a stark warning has emerged from the crypto world. Arthur Hayes, co-founder of BitMEX, believes the hype is premature and warns the token could plummet by as much as 99%.
Why Hayes Considers Monad So Risky #
In an interview with Altcoin Daily, Hayes labeled Monad a “VC coin.” This term refers to a token where venture capitalists and early investors hold a large portion of the supply, while only a small fraction is publicly circulating. This limited supply can cause the price to rise quickly, not necessarily due to real demand but simply because of scarcity.
Hayes cautions that once these large investors are permitted to sell their holdings, the price could crash dramatically. He notes this is a common pattern for new tokens with a high Fully Diluted Value (FDV) but a low circulating supply. He sees Monad fitting this description perfectly.
According to Hayes, new tokens almost always get an initial price jump. However, this doesn’t guarantee long-term utility or sustained demand.
‘Most New Networks Won’t Survive’ #
Hayes believes only a small number of networks will survive in the long run. He thinks that primarily Bitcoin, Ethereum, Solana, and Zcash will stand the test of time, while the rest still need to prove their worth.
Monad raised €194 million last year, which might seem like a strong vote of confidence. However, Hayes argues that raising a lot of money is no guarantee that users will actually adopt the network. Without genuine interest, the price could still collapse eventually.
Yet Positive Expectations for the Market #
Despite his critical take on Monad, Hayes is generally optimistic about the crypto market. He expects the market to rise further, as he predicts governments will start pumping more money into the financial system. This typically leads to more investment, including in the crypto market.
He also no longer believes the four-year Bitcoin cycle is the most important factor. In his view, it all comes down to how much money is being spent globally. If that increases, crypto will follow.
Privacy Will Be the Next Trend, According to Hayes #
Hayes predicts that privacy coins and technologies offering users more anonymity will be the next big hype.
He believes major financial institutions will primarily build on Ethereum, but privacy-specific projects will also play a larger role. Zcash is even his second-largest investment within his own company, which puts his statements in a slightly different context.
Whether Monad will ultimately be a success remains to be seen. There is interest right now, but Hayes warns that the risks are at least as significant.