Arthur Hayes reignites debate in the crypto market with a cutting critique of Monad, a new layer-1 blockchain launched with strong media attention and notable industry support. His comments call into question the initial momentum of the project and raise broader questions around highly valued, venture capital-backed tokens.
In brief
- Hayes warns that Monad's high FDV and low flotation could expose retail investors to significant losses, despite strong initial demand for MON.
- The MON public sale raised $269 million from 85,820 buyers, significantly exceeding the allocation and reflecting intense interest.
- Concerns emerged after Coinbase's sales guidance, although MON quickly rebounded, rising 46% after a phase of volatility.
- Hayes believes that privacy-focused cryptocurrencies, such as Zcash, will lead the next cycle, driven by further liquidity expansion and institutional activity.
Monad could lose momentum after initial spike, Hayes says
Hayes issued a stark warning regarding Monad, estimating that the MON token could fall by as much as 99%. In an intervention on Altcoin Daily, he compared MON to several recent launches characterized by high FDV and low flotation, often followed by sharp corrections after rapid rises.
The fully diluted value (FDV), or the valuation of a project if all the tokens were in circulation, is at the center of its concerns. According to him, the significant gaps between the FDV and the actual volume of tokens available on the market expose individual buyers to a pronounced downside risk.
Hayes judge that many recent projects follow a predictable pattern: an initial peak of interest, a rapid rise, then strong selling pressure as insider tokens are unlocked. For him, the dynamics observed on Monad are part of this logic, and the gains of the first days are not enough to convince of the sustainability of the network.
He believes that Monad will likely join a set of new layer-1 blockchains that quickly lose momentum after launch. According to Hayes, only a few networks, Bitcoin, Ether, Solana and Zcash, will maintain a sustainable place in the next cycle.
Monad Mainnet Launch Sparks Massive Participation and Rapid Rebound
Alongside its reviews, Monad's launch attracted considerable attention. The project raised $225 million from Paradigm last year and launched its mainnet on Monday.
MON tokens hit the market on November 24 after a public sale on Coinbase, which raised $269 million from 85,820 buyers across more than 70 countries. The allocation has been significantly exceeded, and internal surveys show that many participants plan to hold their tokens for the long term.
Several elements influenced the sale and the initial behavior of the market:
- Very high global participation.
- Commitments far superior to the available offer.
- A declared intention to keep the MON in the long term.
- A temporary confusion related to Coinbase instructions.
- MON price action volatile but capped by a marked rebound.
Hayes predicts privacy coins will lead the next cycle
Hayes also spoke on overall market dynamics, displaying strong confidence in the long-term trajectory. According to him, the return of massive monetary expansion will be the driving force of the next big rally.
I think we are at the end of the beginning of this cycle, and that the phases of money printing worthy of a bull market are still ahead of us.
Arthur Hayes
According to him, governments, particularly in the United States, are preparing to inject significant amounts of liquidity ahead of political cycles and in the face of economic slowdown. He describes the current situation as the “end of the beginning” of a new phase of digital assets.
Hayes rejects the idea that Bitcoin halving determines market action. Rather, he argues that credit expansion in the United States and China has been the real driving force of past cycles. When liquidity contracts, Bitcoin reacts first and acts, according to him, as a “smoke detector of the free market”.
Looking to the future, Hayes believes privacy technologies will take a central role. He is already seeing a resurgence of interest in zero-knowledge systems and privacy-oriented cryptocurrencies. Institutions, according to him, will continue to build on Ethereum, particularly for stablecoins and tokenized finance.
He also revealed earlier this month that Zcash represents the second largest position of his family office, Maelstrom, just behind Bitcoin. Interest in Zcash is also growing elsewhere: Grayscale recently sought approval for the first US ETF linked to the asset.
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