- Arthur Hayes warns that the new layer-1 blockchain Monad could lose up to 99% of its value, citing risks tied to its token distribution and venture capital backing.
- Hayes criticized projects with high Fully Diluted Value (FDV) relative to circulating supply, noting such tokens often face steep price declines after early insider unlocks.
- He identified only a few blockchain networks for long-term survival: Bitcoin (BTC), Ether (ETH), Solana (SOL), and ZCash (ZEC).
- Hayes expects renewed monetary expansion to drive a bullish crypto market, emphasizing that global credit growth, rather than Bitcoin’s halving cycles, fuels price rises.
- Privacy-focused cryptocurrencies and technologies, such as zero-knowledge systems, are predicted to lead future market interest, while institutional adoption will concentrate on Ethereum-based assets.
The crypto veteran Arthur Hayes, former chief of Bitmex, issued a cautionary statement regarding the recently launched layer-1 blockchain Monad. Speaking on Altcoin Daily, Hayes warned that Monad‘s value could drop by as much as 99%, attributing this risk to the project’s high Fully Diluted Value (FDV) combined with a low circulating supply controlled by venture capital investors.
Hayes criticized the structure of Monad‘s token distribution, labeling it “another high FDV, low-float VC coin”. FDV refers to the market value of a cryptocurrency if all issued tokens are in circulation. He cautioned that projects with significant gaps between FDV and circulating tokens tend to see quick price inflations followed by sharp declines when insider tokens become available for sale. Hayes labeled such projects as potential “bear chains”, with initial price pumps not guaranteeing lasting use or adoption.
In his analysis, Hayes identified only a small number of layer-1 blockchains likely to sustain relevance over time. These include Bitcoin (BTC), Ether (ETH), Solana (SOL), and Zcash (ZEC). He noted that most new networks fail to maintain long-term market presence.
Monad recently secured $225 million in funding from the venture capital firm Paradigm and officially went live last Monday. It marked the launch by distributing an airdrop of its MON token. Since launch, the MON token has risen approximately 40%, according to CoinMarketCap.
Despite his concerns over Monad, Hayes maintains an optimistic outlook for the broader cryptocurrency market. He projects another phase of monetary expansion driven by governments, particularly the United States, who may increase liquidity ahead of political events and slower economic growth. Hayes stated, “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.”
He also challenged the conventional Bitcoin four-year halving cycle theory, attributing past price surges instead to global credit expansion led by the U.S. and China. Hayes described Bitcoin as the “last free-market smoke alarm” that reacts first when liquidity tightens.
Looking ahead, Hayes expects privacy-oriented technologies to gain prominence in crypto. He anticipates rising interest in zero-knowledge proofs and privacy coins, alongside institutional use focusing on Ethereum through stablecoins and tokenized financial products. Earlier this month, Hayes revealed that Zcash became the second-largest holding in his family office, Maelstrom, after Bitcoin.
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