BitMEX founder Arthur Hayes has issued a strong warning about the next wave of stablecoin companies going public. In a blog post on Monday, Hayes said investors should trade these new IPOs like “hot potatoes,” suggesting they’re likely to be overhyped and doomed to fail.
Following Circle’s successful IPO on June 5, Hayes believes we’re at the start of a “stablecoin mania.” While Circle’s (CRCL) stock has surged over 80% and recently hit a high of $165, Hayes claims it is “insanely overvalued” and gives away 50% of its interest income to Coinbase.
He expects copycat stablecoin companies to flood the market but warns that they lack the key ingredient for success distribution. According to Hayes, without strong partnerships with crypto exchanges, social media giants, or banks, new stablecoins have “no chance.”
Despite his criticism, Hayes does not recommend shorting these stocks. With growing U.S. support for crypto and possible stablecoin regulations coming soon, these IPOs could rise before crashing. “These new stocks will rip the faces off of shorts,” he said.
Chainlink co-founder Sergey Nazarov also predicts that U.S. stablecoin regulation will trigger a wave of global stablecoin launches. Hayes concludes with a jab at new issuers, calling them “suited-up clowns” selling “dogshit companies” through financial tricks and showmanship.
Also Read: Warren Says Musk, Bezos May Misuse GENIUS Act for Stablecoins
