Former BitMEX CEO Arthur Hayes has stated that Circle\u2019s recent IPO is the starting gun for a \u201cstablecoin mania\u201d bubble, cautioning investors of impending carnage.<\/p>\n
The warning, detailed in Hayes\u2019 latest Substack essay, clashes with bullish data showing stablecoin market capitalization surging to a record $228 billion.<\/p>\n
In the June 17 piece<\/a>, the crypto entrepreneur called Circle\u2019s public listing, which raked in more than $1.1 billion<\/a>, \u201cgrossly overvalued.\u201d He also claimed that it signaled the beginning of a speculative frenzy destined to end in significant losses.<\/p>\n \u201cThe bubble will pop after the launch of a stablecoin issuer on a public market, most likely in the U.S., that separates fools from tens of billions of capital by using a combination of financial engineering, leverage, and amazing showmanship,\u201d Hayes predicted.<\/p>\n He hinged his thesis on one crucial factor for any stablecoin\u2019s survival: distribution at scale.<\/p>\n \u201cThe only question you must ask yourself when evaluating an investment in a stablecoin issuer is this: how will they distribute their product?\u201d the market watcher asserted.<\/p>\n According to him, legacy financial institutions and large crypto exchanges such as Coinbase have effectively monopolized viable distribution channels. For this reason, he feels new entrants will face near-insurmountable barriers in their bid to replicate the successes of incumbents like Tether (USDT).<\/p>\n The 40-year-old believes social media giants like Meta and traditional banks are facing an \u201cExtinction Level Event\u201d from efficient stablecoins, which will inevitably build proprietary solutions, shutting out third-party partnerships.<\/p>\n He pointed to Tether\u2019s staggering profitability, earned via the spread on U.S. Treasury holdings, as the irresistible lure driving the coming wave of overvalued IPOs, despite the closed distribution landscape.<\/p>\n \u201cThe stablecoin narrative is unique in that it has the largest most obvious TAM for a TradFi muppet,\u201d the crypto enthusiast wrote, acknowledging the allure but predicting a \u201croad to destruction\u201d for those who will invest in new stablecoin issuers lacking Tether\u2019s network effects or Circle\u2019s connection with Coinbase.<\/p>\n Hayes\u2019 warning comes against a backdrop of undeniable sector momentum. According to CryptoQuant, the stablecoin market cap has ballooned<\/a> 17% year-to-date (YTD), adding $33 billion to hit $228 billion.<\/p>\n USDT added slightly more than 13% to its market cap in that period, pushing it past $155 billion. Meanwhile, USDC seems to have finally shaken off the aftereffects of its 2023 depeg<\/a> crisis following the Silicon Valley Bank collapse, surging 39% to $61 billion.<\/p>\n Liquidity is also flooding exchanges, with ERC-20 stablecoin reserves hitting about $50 billion, and yield-bearing stablecoins recovering to $6.9 billion.<\/p>\n The post Arthur Hayes Warns Circle\u2019s IPO Could Ignite \u2018Stablecoin Mania\u2019 Bubble<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Former BitMEX CEO Arthur Hayes has stated that Circle\u2019s recent IPO is the starting gun for a \u201cstablecoin mania\u201d bubble, cautioning investors of impending carnage. The warning, detailed in Hayes\u2019 latest Substack essay, clashes with bullish data showing stablecoin market capitalization surging to a record $228 billion. The Distribution Imperative In the June 17 piece, […]<\/p>\n","protected":false},"author":0,"featured_media":74016,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-74015","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/74015"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=74015"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/74015\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/74016"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=74015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=74015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=74015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Booming Stablecoin Market<\/h2>\n