Key takeaways
- Arthur Hayes predicts that most layer 1 blockchain tokens will fail, with the exception of Ethereum and Solana.
- He believes that initial price increases in new layer 1 projects rarely translate into long-term success.
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Arthur Hayes, co-founder of crypto derivatives exchange BitMEX, said he expects most layer 1 blockchain coins outside of Ethereum and Solana to fail, including Monad, a recently launched layer 1 backed by Coinbase Ventures.
“I think pretty much every other L1 except Ethereum or Solana is a zero,” Hayes said, speaking in an interview with Altcoin Daily. “And they’re not going to do very well.”
Hayes predicts that Monad’s MON will collapse by 99% because its valuation is inflated relative to fundamentals, making a sharp decline likely.
“I think it will be another bearish channel. It will go down 99% because it is another high FDV and low flow coin, VC L1,” he added.
MON is trading at around $0.037, up 45% from its ICO price of $0.0254, according to CoinGecko data. The coin has reached a market capitalization of around $398 million.
According to Hayes, new L1 projects typically see an initial price surge, driven by investors hoping to replicate Ethereum’s early gains.
“Every coin is getting its first pump. And people want to believe in the new L1 because everyone wants to invest in the new Ethereum, like they would have done in 2014 when everyone missed it, including me,” Hayes noted, adding that the initial hype, however, does not translate into long-term viability.
When asked which protocols would make up his “magnificent five” in crypto, Hayes highlighted Ethereum, Solana, Bitcoin, Zcash and Ethena.
According to data tracked by Lookonchain, Hayes accumulated 873,671 ENA this week after selling over $5 million worth of ENA two weeks earlier. It also added ZEC amid the recent price rise.
Ethereum remains top choice for institutions, Solana seeks next boost
Regarding Ethereum, Hayes said he believes Ethereum has become the choice for institutional adoption of web3. He argued that large banks and organizations realized that private blockchains offered no real utility and that public chains were essential for security and meaningful use.
According to Hayes, Ethereum will serve as the backbone of the TradFi business, with L2 solutions such as Arbitrum and Optimism helping to meet privacy and scalability needs. He expects the Ethereum ecosystem to drive the next phase of adoption and price growth.
Regarding Solana, Hayes highlighted its strong performance and status as the second-largest public L1, largely due to its previous rally into coin activity. However, he said meme-driven growth has slowed and Solana now needs a new catalyst to maintain its momentum.
“Meme coins are kind of dead in terms of activity compared to where they were in 2023 and 2024. Solana needs a new gimmick.” Hayes said. “I don’t know what this new trick is. But again, it’s number two in L1. I think they’ll come up with something.”
“Will this be enough to drive price performance above Ethereum? I don’t think so,” he added.
