Crypto veteran Arthur Hayes has issued a warning about Monad, saying the recently launched Layer 1 blockchain could collapse by as much as 99% and change into one other failed experiment driven by enterprise capital hype moderately than real adoption.
Speaking on Altcoin Daily, the previous BitMEX boss described the project as “one other high-FDV, low-float VC coin,” arguing that its token structure alone puts retail traders in danger. FDV stands for Fully Diluted Value, i.e. the market value of a crypto project if all of its tokens were already in circulation.
According to Hayes, projects with a big gap between FDV and circulating supply often experience early price spikes followed by sharp sell-offs once insider tokens are unlocked. “It shall be one other bear chain,” Hayes said, adding that while any recent coin experiences an initial boost, that doesn’t mean it’ll develop a long-lasting use case.
Hayes said most recent Layer 1 networks ultimately fail and only a handful are prone to remain relevant in the long run. He named Bitcoin (BTC), Ether (ETH), Solana (SOL), and Zcash (ZEC) because the small group of protocols he expects to survive the following cycle.
Last 12 months, Monad raised $225 million in funding from enterprise capital firm Paradigm. The Layer 1 blockchain went live to tell the tale Monday, accompanied by an airdrop of its MON token.
Monad’s MON token is up 40% since its launch. Source: CoinMarketCap
Hayes stays optimistic
Hayes also expressed an optimistic outlook for the cryptocurrency as a complete, attributed almost entirely to renewed monetary expansion. He argued that governments, particularly the United States, are preparing for one more wave of liquidity injections ahead of political campaigns and a slowdown in growth.
“I believe we’re at the top of the start of this cycle and the large amounts of crazy bull market money printing are ahead,” he said.
He also dismissed the much-cited four-year Bitcoin cycle, saying previous market booms were fueled not by halvings but by global credit expansion led by the US and China. When liquidity dries up, Bitcoin responds first, he said, calling it the “last free market smoke alarm” for the worldwide economic system.
Privacy coins dominate
Looking ahead, Hayes predicted that privacy technologies will dominate the following crypto narrative, with zero-knowledge systems and privacy coins attracting renewed interest. He added that institutional adoption is prone to impact Ethereum, particularly through stablecoins and tokenized finance.
Earlier this month, he announced that Zcash had change into the second-largest holding in his family office Maelstrom, trailing only Bitcoin.
