- Hayes warns that most stablecoin IPOs are overhyped and lack solid distribution.
- He advises against shorting them due to short-term momentum and possible regulatory backing.
BitMEX co-founder Arthur Hayes is sounding the alarm for anyone getting too comfortable with the new wave of stablecoin IPOs. In a recent blog post, he didn’t hold back, comparing these offerings to a “hot potato” and warning traders to treat them as short-term flips, not long-term investments.
Hayes points to Circle’s NYSE listing as the kickoff for what he calls “stablecoin mania”, a phase he thinks will be driven more by hype than fundamentals. And while the excitement might fuel a short-term rally, he’s convinced that many of these IPOs will eventually crash hard once the buzz fades.
Distribution Is the Real Game-Changer
Hayes makes it clear: if a stablecoin project doesn’t have solid distribution, it’s probably not going to last. In his eyes, there are only three real pipelines that matter: centralized crypto exchanges, big Web2 platforms, and traditional banks. But here’s the catch: those routes are already locked down by giants like Coinbase.
Hayes sees a wave coming, banks and big tech firms launching their own stablecoins, and when they do, it’s going to get a lot tougher for smaller projects to compete. As these heavyweights push out their in-house tokens, the so-called “Circle copycats” could find themselves squeezed out, even if they go public with flashy valuations.
Hayes thinks the stablecoin IPO scene is heading straight into bubble territory. He’s calling for a wild run-up, driven by slick marketing, clever financial tricks, and big promises, followed by an ugly crash. In his view, some of these projects will rake in billions using hype, leverage, and flashy theatrics, only to end up burning through it and leaving “fools” holding the bag.
Circle (CRCL): The Warning Sign Everyone’s Ignoring
Hayes pointed to Circle (CRCL) as the standout example. He didn’t mince words, calling it “insanely overvalued”, but still gave credit where it’s due. The only reason Circle’s staying afloat, he says, is its tight partnership with Coinbase, which takes half of Circle’s interest income in return for distribution. Without that kind of backing, most others don’t stand a chance.
Since hitting the NYSE on June 5, Circle’s stock has shot up more than 80%, climbing close to $165 by June 16. Still, Hayes isn’t buying into the hype. What worries him most is that a lot of investors don’t realize just how shaky these business models actually are once you peel back the layers.
Still, Hayes isn’t telling people to start shorting these IPOs just yet. With pro-crypto sentiment picking up and U.S. legislation around stablecoins likely on the way, he thinks these stocks could keep running before things cool off. “These new stocks will rip the faces off of shorts,” he warned, making it clear the risk of betting against the hype is real.
Investors should brace themselves for a wild ride and be ready to move fast before the hype runs out of steam. Hayes doesn’t sugarcoat it—he ends with a brutal truth: a lot of these companies are just “dogshit in a fancy suit,” dressed up to look legit but hollow underneath.
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