Arthur Hayes Warns Monad Could Face Sharp Downturn as Debate Grows Over High-FDV Tokens

Arthur Hayes is stirring debate across the crypto market with sharp criticism of Monad, a new layer-1 chain that launched with significant attention and industry backing. His remarks challenge the project’s early momentum and raise broader questions about high-valuation tokens supported by venture capital. 

Monad May Lose Momentum After Initial Surge, Hayes Says

Hayes has issued a strong warning about Monad, saying the blockchain’s token could fall by as much as 99%. Speaking on Altcoin Daily, he argued that MON resembles earlier high-FDV, low-float launches that posted quick spikes followed by steep declines.

Fully Diluted Value (FDV)—a project’s valuation if all tokens were circulating—is central to the concern of the BitMEX co-founder. Wide gaps between FDV and the amount of supply available for trading, he said, expose retail buyers to significant downside risk.

According to Hayes , many recent launches follow a predictable pattern: early attention, rapid price gains, and then heavy selling pressure once insider tokens unlock. In his view, Monad’s current trend fits this structure, and early gains are not enough to convince him that the network will sustain long-term value.

He believes Monad is likely to join a group of new layer-1 chains that lose momentum after an initial surge. Only a limited number of networks, he said, will remain relevant over time. Hayes pointed to Bitcoin, Ether, Solana, and Zcash as the assets most likely to endure through the next cycle.

Monad’s Mainnet Debut Sparks Heavy Participation and Fast Rebound

Beyond Hayes’ critique, Monad’s recent market debut has drawn considerable attention. The project secured $225 million from Paradigm last year and launched its  mainnet on Monday . 

MON tokens reached the market on November 24 after a public sale on Coinbase that drew notable participation, gathering $269 million in commitments from 85,820 buyers across more than 70 countries. The sale exceeded its allocation, and internal surveys showed that many participants planned to hold their tokens for the long term.

Several factors shaped the token sale and early market behavior:

• Global participation drew tens of thousands of buyers.
• Commitments exceeded available supply by a wide margin.
• Many participants indicated long-term holding plans.
• Questions about Coinbase’s instructions led to brief confusion.
• Price action was volatile but finished with a strong recovery.

Hayes Predicts Privacy Coins Will Lead the Next Market Phase

Hayes also addressed the wider market outlook, expressing firm confidence in crypto’s long-term direction . He believes renewed monetary expansion will be the main driver of the next major rally. 

I think that we are at the end of the beginning of this cycle and the massive amounts of crazy bull market money printing is ahead of us.

Arthur Hayes

According to him, governments—especially in the United States—are preparing for significant liquidity injections ahead of political cycles and slowing economic growth. He described current conditions as the “end of the beginning” of a new phase for digital assets.

He dismissed the idea that Bitcoin’s four-year halving cycle dictates market behavior. Instead, he argued that global credit expansion led by the US and China has been the real force behind past surges. When liquidity tightens, Bitcoin reacts before other assets, and he referred to it as the “last free-market smoke alarm” signaling stress across the global system.

Looking forward, Hayes expects privacy technologies to become a central theme of the next cycle. He sees growing interest in zero-knowledge systems and privacy-focused cryptocurrencies. Institutions, he said, will likely continue building on Ethereum, especially for stablecoins and tokenized finance. 

Earlier this month, he revealed that Zcash is the second-largest holding in his family office, Maelstrom, behind only Bitcoin. Interest is also rising elsewhere, with Grayscale seeking approval for the first American ETF tied to Zcash .