Arthur Hayes, the founding partner of Bitmex, one of the names that have been guiding the crypto currency industry for many years, pointed out that a new stablecoin fury could begin after the successful public offering of Circle. Hayes, in a blog post on the subject, this development in the sector may be a harbinger of a new and large balloon. In addition, Circle’s success in the stock exchange with other companies can enter the market to realize similar moves, he said.
Stablecoin craze and possible dangers
Arthur Hayes said that with the interest in Circle’s public offering, an extreme demand for stablecoin projects may occur, and that this situation may lead to new players to attract investors with high return promises. Hayes suggested that financial engineering and high leverage use may pose a risk for investors in such an environment.
Arthur Hayes: “In Stablecoin exporters, the balloon explodes after opening their own projects to the public. Some people can convince investors with great growth promises with financial engineering, leverage and exaggerated presentations.”
It is thought that serious losses may be experienced especially if companies looking for capital through public offering operate away from transparency. In the past, a similar loss of $ 40 billion after the sudden collapse of the Terra/Luna ecosystem had experienced a loss of value.
WARNINGS ON ADMINISTRATION AND DISTRIBUTION CHANNELS
Hayes pointed out that the future of Stablecoin projects is largely dependent on the US regulation policies. He said that a more flexible arrangement environment could prepare the ground for the emergence of new and risky products in the market.
Arthur Hayes: orsa If more centers are recognized as to what is behind Stablecoins and whether investors are offered to investors, speculative and non -transparent models can be repeated. ”
In this respect, it was recommended to be cautious against the projects attracting investors with the promise of earnings. Hayes, referring to Terra/Luna example, said free regulations and financial instruments can cause significant losses in the sector.
Importance of distribution strategies for investors
Arthur Hayes argued that a Stablecoin company should be carefully approaching how the project can distribute its product before investing. According to him, large crypto exchanges, large social media companies or traditional banks need to be activated in order to reach millions of a Stablecoin.
Arthur Hayes: “When examining a project, see if they have distribution channels. If they do not have this access, they have no chance of success and should be avoided.”
Hayes advised investors to approach cautiously, especially if they cannot clearly confirm how the project will reach its users. It was suggested that the project does not have widespread distribution channels is a major risk factor.
Arthur Hayes’ assessments, Circle’s public offering after the public offering of the market movements to reveal new risks for the sector. In particular, the uncertainty of the regulatory framework and the expectation of high return on investors may lead to fluctuations in the markets. In this period, it is important that investors closely follow the distribution channels and transparency levels of projects. In addition, examples such as Terra/Luna in the past underline that investors should act carefully.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
