Crypto veteran Arthur Hayes has issued a warning about Monad, saying the newly launched layer 1 blockchain could fall by up to 99% and end up as another failed experiment driven by venture capital hype rather than real adoption.
Speaking on Altcoin Daily, the former BitMEX boss described the project as “another high-FDV, low-float VC coin,” arguing that its token structure alone puts retail traders at risk. FDV stands for Fully Diluted Value, which is the market value of a crypto project if all of its tokens were already in circulation.
According to Hayes, projects with a large gap between FDV and circulating supply often experience early price spikes, followed by deep sell-offs once internal tokens are unlocked. “It’s going to be another bearish chain,” Hayes said, adding that while each new coin gets an initial pump, that doesn’t mean it will develop a lasting use case.
Hayes said most new Layer 1 networks eventually fail, and only a few are likely to retain relevance in the long term. He named Bitcoin (BTC), Ether (ETH), Solana (SOL), and Zcash (ZEC) as the small group of protocols he hopes will survive the next cycle.
Last year, Monad raised $225 million in funding from venture capital firm Paradigm. The layer 1 blockchain went live on Monday, accompanied by an airdrop of its MON token.
Related: Did Bitcoin hit bottom? Arthur Hayes believes $80,000 will remain
Hayes remains optimistic
Hayes also presented a bullish outlook for cryptocurrencies as a whole, driven almost entirely by renewed monetary expansion. He argued that governments, particularly the United States, are preparing for another wave of liquidity injections ahead of political campaigns and slowing growth.
“I think we are at the end of the beginning of this cycle and we are in for massive amounts of money printing in the bull market,” he said.
He also dismissed Bitcoin’s widely cited four-year cycle, saying past market booms were driven not by halvings but by global credit expansion led by the United States and China. When liquidity dries up, Bitcoin reacts first, he said, calling it the “latest free market smoke alarm” for the global financial system.
Related: Arthur Hayes: Bitcoin’s four-year cycle is dead
Privacy Coins to Master
Looking ahead, Hayes predicted that privacy technologies will dominate the next crypto narrative, and that zero-knowledge systems and privacy coins will see renewed interest. He added that institutional adoption is likely to take hold on Ethereum, especially through stablecoins and tokenized finance.
Earlier this month, he revealed that Zcash has become the second-largest holding in his Maelstrom family office, behind only Bitcoin.
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