Arthur Hayes Warns of Overvalued Stablecoin IPOs After Circle Surge, Urges Caution Amid ’Stablecoin Mania’
BitMEX founder Arthur Hayes warns crypto traders that Circle’s successful IPO may trigger a surge in stablecoin-related public offerings, all potentially overvalued due to ongoing ’stablecoin mania.’ Hayes views Circle (CRCL) as significantly overpriced but cautions against shorting stablecoin stocks in the current hype-driven market, as early enthusiasm and pro-crypto sentiment could drive valuations higher in the near term. He emphasizes that only crypto exchanges, leading Web2 platforms, and legacy financial institutions hold meaningful distribution power, making it difficult for new entrants to achieve market penetration. Hayes attributes Tether’s (USDT) dominance to strategic distribution partnerships, particularly in Asian markets, and suggests most new stablecoins lack the distribution channels required for success. He notes that the upcoming US Senate vote on stablecoin regulation could accelerate further IPOs, potentially fueling a capital-driven bubble in the stablecoin sector. Hayes advises traders to stay wary of newly public stablecoin firms, carefully evaluating their distribution capabilities and long-term sustainability rather than chasing short-term momentum.
Neutral
Arthur Hayes highlights that while Circle and upcoming stablecoin IPOs are likely overvalued, broad market enthusiasm and institutional interest may keep prices high in the short term, discouraging shorting strategies. The influx of new stablecoin stocks and potential regulatory developments could introduce heightened volatility, but there is no clear direction for sustained bullish or bearish impact on stablecoins themselves without fundamental improvements in distribution and user trust. The advice is to remain cautious, focusing on fundamentals and avoiding momentum-driven trades during the hype phase.