Nazia Saeed
BitMEX founder Arthur Hayes has issued a sharp warning about the looming surge of stablecoin-related initial public offerings (IPOs), calling it a bubble fueled by hype, overvaluation, and shallow distribution strategies. In his latest blog post, Hayes framed Circle’s recent IPO success as the catalyst for a new era of speculative frenzy, but one destined to fail for most new entrants.
“The reason why I’m writing another missive about stablecoins is because of the blow out success of the Circle IPO. To be clear, Circle is grossly overvalued, but the price will continue levitating. The listing marks the beginning not the end of this cycle’s stablecoin mania. The bubble will pop after the launch of a stablecoin issuer on a public market,” the blog post read.
‘Circle copycats’ incoming—and most will fail
Hayes predicted a flood of “Circle copycats” attempting to ride the momentum of Circle’s (CRCL) blockbuster public listing, which has seen its share price climb over 80% since debuting on June 5, reaching an all-time high just under $165 by June 16. But despite the bullish sentiment, Hayes believes most of these newcomers are doomed from the start.
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While Hayes expects short-term upside driven by retail enthusiasm and regulatory momentum, he strongly discouraged shorting these stocks. The political climate in the U.S., particularly pro-crypto narratives surrounding upcoming legislation, could send valuations soaring before the eventual fallout.
Stablecoin regulation could accelerate the mania
The U.S. Senate is preparing to vote on key stablecoin legislation on June 17, which could serve as another tailwind for the IPO wave. The passage of the bill would not only formalize the stablecoin sector in the U.S. but also spark global copycat initiatives, according to Chainlink co-founder Sergey Nazarov, who echoed Hayes’ view that a regulatory green light could unleash a new cycle of stablecoin launches.
Distribution is the real challenge—not hype
Hayes emphasized that the fundamental challenge for any stablecoin issuer isn’t product design—but distribution. He identified only three viable pipelines: crypto exchanges, major Web2 platforms (such as social media giants), and traditional banking networks. Without access to at least one, he argued, new issuers have virtually “no chance of success.”
Distribution bottlenecks are compounded by the fact that existing players already dominate these channels. Entrants will likely face steep listing fees, need to offer high deposit yields to attract users, or be crowded out entirely by in-house stablecoin offerings from social media or banking giants.
ARK invest trims Circle exposure as valuation climbs
In a related move reflecting shifting sentiment in the stablecoin space, Cathie Wood’s ARK Invest sold a total of 342,658 shares of Circle Internet Group Inc. across three of its exchange-traded funds on Monday. The sale, worth approximately $51.7 million, came as Circle’s stock reached a new all-time high.
ARK’s Innovation ETF (ARKK) offloaded 196,367 shares, while the Next Generation Internet ETF (ARKW) sold 92,310 shares. The Fintech Innovation ETF (ARKF) shed an additional 53,981 shares.
