Arthur Hayes warns Monad might crash 99%, calls it high-risk ‘VC coin’

Crypto veteran Arthur Hayes has issued a warning over Monad, saying the just lately launched layer-1 blockchain might plunge as a lot as 99% and find yourself as one other failed experiment pushed by enterprise capital hype slightly than actual adoption.

Talking on Altcoin Each day, the previous BitMEX chief described the mission as “one other excessive FDV, low-float VC coin,” arguing that its token construction alone places retail merchants in danger. FDV stands for Absolutely Diluted Worth, which is the market worth of a crypto mission if all its tokens had been already in circulation.

In response to Hayes, tasks with a big hole between FDV and circulating provide usually expertise early value spikes, adopted by deep selloffs as soon as insider tokens unlock. “It’s going to be one other bear chain,” Hayes stated, including that whereas each new coin will get an preliminary pump, that doesn’t imply it’ll develop a long-lasting use case.

Hayes stated most new layer-1 networks finally fail, with solely a handful more likely to retain long-term relevance. He named Bitcoin (BTC), Ether (ETH), Solana (SOL) and Zcash (ZEC) because the small group of protocols he expects to outlive the subsequent cycle.

Final yr, Monad raised $225 million in funding from enterprise capital agency Paradigm. The layer-1 blockchain went reside on Monday, accompanied by an airdrop of its MON token.

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Hayes stays bullish

Hayes additionally laid out a bullish outlook for crypto as an entire, pushed nearly fully by renewed financial enlargement. He argued that governments, significantly the US, are making ready for an additional wave of liquidity injections forward of political campaigns and slowing development.

“I believe that we’re on the finish of the start of this cycle and the huge quantities of loopy bull market cash printing is forward of us,” he stated.

He additionally dismissed the broadly cited four-year Bitcoin cycle, saying previous market booms had been fueled not by halvings however by international credit score enlargement led by the US and China. When liquidity dries up, Bitcoin reacts first, he stated, calling it the “final free-market smoke alarm” for the worldwide monetary system.

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Privateness cash to dominate

Trying forward, Hayes predicted privateness applied sciences will dominate the subsequent crypto narrative, with zero-knowledge methods and privateness cash seeing renewed curiosity. He added that institutional adoption is more likely to choose Ethereum, particularly by means of stablecoins and tokenized finance.