Monad's Future: BitMEX Co-Founder Predicts 99% Crash

The Enigma of Monad: Hype vs. Utility in the L1 Landscape

The cryptocurrency ecosystem is perpetually abuzz with the emergence of novel protocols, each vying for supremacy in a dynamic and often volatile market. Recently, Monad, an aspiring Layer 1 blockchain, captured considerable attention following its much-anticipated launch. Its native token, MON, initially demonstrated robust performance, experiencing a significant 80% surge that propelled it to an all-time high of $0.048 on November 26. This initial euphoria, however, has been tempered by a starkly pessimistic outlook from a prominent figure in the crypto world, Arthur Hayes, co-founder of BitMEX. His commentary casts a shadow of skepticism over Monad's long-term viability, stirring a crucial debate about the fundamental value proposition of new Layer 1 initiatives.

Arthur Hayes: A Voice of Caution on Monad's Future

Arthur Hayes is renowned for his candid and often provocative insights into market trends and project evaluations. In a recent interview with Altcoin Daily, Hayes did not mince words regarding his assessment of Monad. He articulated a firm belief that, beyond established giants like Ethereum and Solana, the prospects for most other Layer 1 blockchains are effectively "zero." Hayes specifically cited Monad as an illustrative example of what he terms a "high FDV (Fully Diluted Valuation), low-float" token – a characteristic he views with considerable apprehension.

The seasoned crypto veteran drew a direct parallel between Monad and Berachain, a protocol whose native token, BERA, has languished significantly below its all-time high since its February 2025 launch. Berachain's current trading price, nearly 94% beneath its peak of $14.83, serves as a sobering precedent for Hayes's dire forecast. He boldly predicted that Monad's native token could witness a precipitous decline of up to 99% following its initial post-launch surge. This prediction is not merely speculative; it is rooted in Hayes's observed patterns of market behavior where new projects, despite initial enthusiasm, often struggle to establish sustainable utility.

The "FOMO" Phenomenon and the Quest for Real Use Cases

Hayes underscored that the initial price surges witnessed by many new projects are frequently driven by FOMO, or the "fear of missing out." This psychological phenomenon is particularly potent in the crypto market, where early investors in projects like Ethereum reaped astronomical returns. This historical success creates a powerful narrative, prompting subsequent generations of investors to eagerly seek out the "next Ethereum" among newly launched Layer 1s. The allure of life-changing gains can overshadow diligent research into a project's fundamentals, technology, and long-term economic model.

As Hayes articulated, "Every coin gets their first pump and people want to believe in the new L1. Everybody wants to invest in the new Ethereum like they would have in 2014 when everyone missed it. Me included. But again, that doesn’t mean it [Monad] is going to actually have any real use case." This perspective underscores a critical distinction between speculative asset appreciation and intrinsic protocol value. For Hayes, the absence of a demonstrable, unique utility beyond mere transactional capacity renders many new Layer 1s vulnerable to significant corrections once the initial speculative fervor subsides. Indeed, the Monad token's value has already begun to reflect this, having declined over 40% from its Wednesday peak, currently hovering around $0.0285 at the time of this analysis.

Beyond Layer 1s: Hayes' "Magnificent Five" and Emerging Narratives

Shifting focus from what he perceives as overhyped Layer 1s, Hayes outlined his "magnificent five" protocols that he believes hold genuine promise in the current cryptocurrency landscape. This curated list includes foundational assets like Bitcoin and Ethereum, alongside Solana, the privacy-focused ZCash, and Ethena. The inclusion of ZCash is particularly telling and aligns with Hayes's broader conviction regarding the future direction of the crypto market.

Hayes anticipates a significant resurgence in the narrative surrounding privacy-focused cryptocurrencies, projecting that protocols such as ZCash and Monero will gain even greater prominence in the coming year. This emphasis on privacy reflects a growing awareness and demand for robust, censorship-resistant digital transaction capabilities in an increasingly surveilled digital world. Furthermore, Hayes identified Zero Knowledge (ZK) proofs and quantum resistance as two other critical crypto narratives poised to dominate discussions and developments in 2026 and beyond. He specifically highlighted the ZK space as the most fertile ground for identifying the next major winner in the crypto market over the next one to two years. The underlying technology of ZK proofs, enabling verification of information without revealing the information itself, holds immense potential across various applications, from enhanced privacy to scalable blockchain solutions.

In conclusion, while Monad's initial market debut generated considerable excitement, Arthur Hayes's seasoned perspective offers a vital counter-narrative. His warnings about the perils of speculative pumps in the absence of tangible use cases serve as a crucial reminder for investors. As the cryptocurrency market matures, the focus, according to Hayes, will increasingly shift from generalized Layer 1 solutions to specialized protocols offering clear utility, particularly in areas like privacy and advanced cryptographic techniques such as Zero Knowledge proofs. The ultimate trajectory of Monad, like any emerging protocol, will undoubtedly be determined by its ability to transcend initial hype and establish enduring value within a rapidly evolving digital economy.