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Sujit Kumar
Jun 17, 2025

Arthur Hayes Warns: Trade New Stablecoin IPOs Like a 'Hot Potato'

Arthur Hayes Warns
Arthur Hayes, co-founder of BitMEX, has issued a stark warning to investors regarding the impending wave of stablecoin Initial Public Offerings (IPOs). Following Circle's successful public listing, Hayes cautions that many new stablecoin issuers entering the market will be significantly overvalued and are likely to fail, advising traders to approach these investments "like a hot potato."

The Looming "Stablecoin Mania"

Hayes posits that Circle's IPO marks the beginning of a "stablecoin mania," a period where numerous companies will attempt to replicate its success. However, he predicts that this bubble will inevitably burst after a stablecoin issuer goes public, leading to substantial capital losses for unsuspecting investors. He describes the upcoming listings as "Circle copycats," emphasizing that while pro-crypto sentiment and the overarching "stablecoin mania" narrative may initially drive prices up, the underlying fundamentals of these new ventures are often weak.

Limited Distribution Channels: A Key Hurdle

According to Hayes, the fundamental challenge for any stablecoin issuer lies in its ability to effectively distribute its product. He identifies only three viable channels: established crypto exchanges, major Web2 social media platforms, and traditional legacy banks. Without access to these critical avenues, Hayes asserts that new stablecoin issuers have "no chance of success." He explains that existing players already dominate these channels, forcing new entrants to incur substantial fees to exchanges or offer high yields to depositors, making profitability elusive. Furthermore, he anticipates that social media giants and banks will eventually develop their own stablecoins, further limiting market access for independent issuers.

Circle's Valuation and Future Outlook

Despite his broader skepticism, Hayes acknowledges that Circle (CRCL) itself, while "insanely overvalued" in his view, is likely to continue its upward trajectory for now. Circle's stock has seen a significant surge since its listing, demonstrating strong market interest. However, Hayes's overall message remains a cautionary one: without robust, established distribution networks, the majority of new stablecoin IPOs will struggle to gain traction and deliver long-term value to investors.

Arthur Hayes Warns: Trade New Stablecoin IPOs Like a 'Hot Potato'
Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.

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