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The Coin Rise 2025-06-17 09:30:34

Arthur Hayes Predicts Stablecoin Bubble After Circle’s IPO Surge

BitMEX co-founder Arthur Hayes has issued a stark warning to investors following Circle’s successful public listing, predicting that the market is entering a phase of “stablecoin mania” that could end in widespread failures and financial losses. In a Monday blog post, Hayes expressed skepticism about a potential wave of copycat stablecoin companies aiming to replicate Circle’s (CRCL) IPO success . Hayes emphasized that Circle’s listing is likely just the beginning of a broader speculative frenzy. “The listing marks the beginning, not the end of this cycle’s stablecoin mania,” he wrote. He foresees a situation where companies attract massive investments by using financial tricks, excessive leverage, and flashy marketing—but ultimately lack a solid foundation. “The bubble will pop after a stablecoin issuer convinces investors to part with tens of billions, only to collapse,” he warned. New Entrants in Stablecoin World According to Hayes, most new stablecoin companies won’t survive. He outlined that the real challenge for these firms lies in distribution—specifically, how and where they get their stablecoins into users’ hands. Hayes identified three main distribution avenues: cryptocurrency exchanges, Web2 social media giants, and traditional banks. He argued that without access to at least one of these, a new stablecoin issuer has “no chance of success.” He added that existing players have already secured these routes, making it nearly impossible for newcomers to enter without paying significant fees or giving up yield. He noted that social media companies and banks are more likely to develop their own stablecoins rather than partner with third-party issuers. Despite his grim outlook, Hayes refrained from advising traders to short these companies’ stocks. “These new stocks will rip the faces off of shorts,” he wrote, citing the growing pro-crypto sentiment in the U.S. and momentum around stablecoin legislation. The U.S. Senate is expected to vote on a major stablecoin bill on June 17, which could further energize the market. Circle Soars Amid Caution Hayes was particularly critical of Circle’s current valuation, describing CRCL as significantly overvalued. He noted that Circle shares 50% of its interest earnings with Coinbase, which he sees as a structural weakness. Nevertheless, he acknowledged that the stock price is likely to remain high for now due to market hype. Circle’s share price has surged over 80% since its June 5 debut, hitting nearly $165 on June 16, according to Google Finance. Hayes sees this as a sign of things to come—but not in a good way. The post Arthur Hayes Predicts Stablecoin Bubble After Circle’s IPO Surge appeared first on TheCoinrise.com .

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