News View Non-AMP

Arthur Hayes Warns Stablecoin IPOs Are a Bubble Waiting to Burst

Published by
Zafar Naik

There’s a wave of excitement around stablecoin IPOs, but crypto veteran Arthur Hayes is ‘waving’ a red flag. The former BitMEX CEO believes this gold rush could end badly, especially for everyday investors.

In a new blog post, Hayes called Circle’s IPO “grossly overvalued” and warned that the rush of stablecoin companies going public could blow up into a financial bubble.

With Tether still dominating, banks moving in, and retail investors chasing quick profits, Hayes suggests the market may be heading for trouble.

Tether’s Strong Dominance

Hayes bases his warning on how the stablecoin market has evolved. Tether’s USDT, launched in the 2010s through a key partnership with Bitfinex, quickly became the go-to token for crypto traders—especially in Asia.

It’s simple, widely available, and now heavily used in countries with unstable currencies and limited access to banking. Hayes puts it bluntly: “The Global South is banked by Tether.”

Meanwhile, Circle’s USDC has found success in the U.S. and Europe, thanks to its clean image and backing from Coinbase. Still, it hasn’t come close to matching USDT’s global reach. Hayes says Circle played up its American roots with a message: “America = Safe.” But even a decade later, USDT continues to lead the pack.

Banks and Giants Rope In

Now, the stablecoin space is shifting again. Big banks are getting serious and they don’t want to rely on outside issuers like Circle. Hayes believes they’ll launch their own stablecoins instead. Why share the profits or take on unnecessary risk when they can do it all in-house?

Tech and retail giants like Amazon and Walmart are reportedly exploring the same path. That means fewer opportunities for existing stablecoin firms to grow or survive.

Hayes warns investors to be cautious. If a company claims it will partner with a legacy bank to scale its stablecoin, he says, “run for the hills.” That route may no longer be realistic.

What to Expect?

Although Circle experienced a post-IPO surge, Hayes remains doubtful regarding its long-term outlook, as well as that of other stablecoin IPOs. He anticipates that a market adjustment initiated by “financial engineering, leverage, and impressive performance” could lead to retail investors losing billions.

Regardless, Hayes believes that there are profits to be gained in the short-term frenzy. With stablecoin prices soaring, retail investors need to be cautious; this bubble, he cautions, might burst with fatal effects.

Zafar Naik

Zafar is a seasoned crypto and blockchain news writer with four years of experience. Known for accuracy, in-depth analysis, and a clear, engaging style, Zafar actively participates in blockchain communities. Beyond writing, Zafar enjoys trading and exploring the latest trends in the crypto market.

Recent Posts

A Brewing War? How Jupiter, BullX, and Axiom are Grappling with AI‑Powered “Vibe” Traders

What happens when retail traders get smart? The house fights back. In this context, one…

July 8, 2025

These 4 Coins Will Grow $100 into $10,000 Faster Than Shiba Inu (SHIB) Did, All Priced Below $0.50

In 2021, Shiba Inu (SHIB) shocked the world by transforming small investments into substantial wealth.…

July 8, 2025

Ruvi AI (RUVI) Sparks Comparison With Solana (SOL), Analysts Say Its Audited Utility Token Can Be This Cycle’s Best Performer

Cryptocurrency enthusiasts and analysts are buzzing over the rise of Ruvi AI (RUVI), a blockchain-based…

July 8, 2025

Meet Pepeto: The Frog Memecoin Aiming to Outrank DOGE, SHIB & PEPE in 2025

The memecoin landscape has matured far beyond what many expected. What started as jokes have…

July 8, 2025

Is $1 Still Possible for Dogecoin (DOGE)? Experts Tip a Newcomer With Real-World Utility to Outperform

Dogecoin (DOGE) blasted from $0.166 to $0.173 on July 6, its best hourly jump in…

July 8, 2025

Cardano (ADA) Whales Accumulate Before Potential Rally, But It’s This Undervalued Token Drawing the Buzz In July

While ADA whales continue to stockpile quietly, a rising contender Remittix (RTX) is stealing the…

July 8, 2025