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.
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.
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.