Crypto Veteran Arthur Hayes Warns Monad May Fail, Highlights Bitcoin and Ethereum as Long-Term Survivors

Hayes Cautions Possible Plunge of Monad as Another Failed Venture Capital Experiment

Arthur Hayes, a seasoned player in the crypto sphere, has recently uttered a warning about Monad, the newly introduced layer-1 blockchain. Hayes reckons that Monad may plummet by as much as 99% and might become yet another failed experiment that fell to venture capital hype, rather than genuine adoption.

Understanding the Hype Around Monad Project

Hayes conveyed his perspectives on Altcoin Daily, where he tagged the project as another high FDV (Fully Diluted Value), low-float venture capital coin. In his opinion, the very configuration of Monad’s token structure sets retail traders in a risky situation. Fully Diluted Value indicates the market value of a crypto venture, considering all its tokens were already circulating. Hayes elaborated further that projects showing a significant gap between FDV and circulating supply are prone to experience early price raises, followed by intense sell-offs as soon as insider tokens are unlocked. The concept of a “bear chain” was also introduced by Hayes, which signifies that while each new coin experiences an initial pump, it does not guarantee the development of a sustainable use-case scenario.

Are New Layer-1 Networks Destined to Fail?

Hayes shared his prediction that most fresh layer-1 networks might ultimately meet failure. In his opinion, only a selected few are likely to maintain long-term relevance. He listed Bitcoin, Ethereum, Solana, and Zcash among the small group of protocols he expects to survive the upcoming cycle. In the previous year, Monad managed to secure $225 million in funding from the venture capital entity Paradigm. The layer-1 blockchain was launched recently with an accompanying airdrop of its distinct MON token.

Bullish Crypto Outlook Buttressed by Renewed Monetary Expansion

Despite his apprehensions about Monad, Hayes sketched a generally optimistic prediction for the entire crypto space, given its impetus is majorly bolstered by reinvigorated monetary expansion. Hayes argued that national governments, especially the USA, are gearing up for another wave of liquidity injections in anticipation of political campaigns and a slowdown in growth.

Dismissing the Four-Year Bitcoin Cycle

Hayes also put forward his views on the much-referred to four-year Bitcoin cycle, discrediting it by stating that past market surges were not a result of ‘halvings’, but instead occurred due to global credit expansion, led by USA and China. He also alluded to Bitcoin as the last free-market smoke alarm for the global financial system.

Upcoming Crypto Trends and Institutional Adoption

Looking towards the future, Hayes anticipates that privacy technologies will dominate the subsequent crypto narrative, with zero-knowledge systems and privacy coins witnessing renewed interest. Ethereum is the platform he considers most likely to be adopted institutionally, largely due to stablecoins and tokenized finance. Additionally, he reported earlier this month that Zcash has become the second-largest holding in his family office Maelstrom, right behind Bitcoin. The surge of projects like Monad, facing heavy criticism from veteran voices of the industry, indicates another chapter of crypto exploration. On the one hand, the fascination of new technologies is attracting massive investments. On the other, experts like Hayes are reminding us of the importance of mindful adoption over trend-driven hype.