Stablecoin IPOs: The Hilarious Circus of Financial Follies! 🎪💸

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Ah, dear reader! Gather ’round as we delve into the whimsical world of finance, where BitMEX’s very own Arthur Hayes, a sage of sorts, warns us of a tempestuous tide of new stablecoin enterprises eager to mimic the illustrious Circle’s public offering. Yet, lo and behold, these ventures are more likely to meet their doom than to bask in the glory of success! 😱

In a post that could rival the finest of Russian literature, Hayes cautioned that while Circle’s IPO heralds the dawn of “stablecoin mania,” most of these new public stablecoin companies are destined to be overvalued and ultimately fail. A tragicomedy, indeed!

“The listing marks the beginning, not the end of this cycle’s stablecoin mania,” he proclaimed, adding that the bubble shall burst after the grand unveiling of a stablecoin issuer that will separate the foolish from their hard-earned billions through a delightful concoction of financial engineering, leverage, and a dash of showmanship. Bravo! 👏

As the next wave of listings approaches, we shall witness the rise of “Circle copycats,” he warned, advising investors to “Trade this shit like you would a hot potato.” A most fitting metaphor for the times! 🥔🔥

Don’t short, warns Hayes

However, our dear Hayes refrained from urging traders to short these stocks, for the pro-crypto sentiment in the United States and the ever-entertaining “stablecoin mania” narrative will initially propel prices skyward. “These new stocks will rip the faces off of shorts,” he cautioned, a vivid image indeed! 😅

The US Senate, in its infinite wisdom, is poised to vote on pivotal stablecoin legislation today, June 17, which could further fuel this narrative if it passes. “Stablecoin regulation in the US will kick off a wave of new stablecoins in the US and all over the world,” concurred Chainlink co-founder Sergey Nazarov, adding to the delightful chaos. 🌍

New stablecoins have limited chances of success

Hayes, in his infinite sagacity, argued that the fundamental question for any stablecoin issuer is how they will distribute their product. He identified only three viable distribution channels: crypto exchanges, Web2 social media giants, and the venerable legacy banks. Without access to these channels, new stablecoin issuers have “no chance of success,” he lamented. 😔

Most new public stablecoin companies will be overvalued and fail, as distribution channels are already locked up by existing players. New entrants will have to pay substantial fees to exchanges or yield to depositors, while social media companies and banks will merrily build their own stablecoins, he explained. A veritable circus of competition!

“For those of us who have been in the trenches for some time, it will be hilarious to watch the suited-up clowns that are able to hoodwink the investing public into investing in their dogshit companies.”

Circle (CRCL) is overvalued

Hayes argues that Circle (CRCL), at this stage, is “insanely overvalued,” handing over 50% of its interest income to Coinbase. Yet, he predicts its price will “continue levitating,” a true marvel of modern finance! 🎈

Circle completed a successful initial public offering on June 5, with its share price soaring by the end of the trading session. CRCL is currently up more than 80% since its listing, hitting an all-time high of just below $165 on June 16, according to Google Finance. A tale of triumph or folly? Only time will tell!

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2025-06-17 08:38