Arthur Hayes, the co-founder of BitMEX, has sent shockwaves through the cryptocurrency market with a sudden and dramatic reversal of his stance on Monad (MON), a newly launched layer-1 blockchain token. After initially expressing bullish sentiment, Hayes has now warned that Monad could crash by as much as 99%, labeling it a high-risk "VC coin".
Hayes' initial interest in MON was expressed humorously, acknowledging its high Fully Diluted Valuation (FDV) and low float, but admitting he "aped" in, citing the ongoing bull market. This sparked an immediate surge in the token's price, with MON jumping over 30% to nearly $0.048. However, this enthusiasm was short-lived. Just seven hours later, Hayes backtracked, declaring "I'm out. Send this dogshit to ZERO!". This abrupt shift caused immediate confusion and backlash within the crypto community.
The reasons behind Hayes' change of heart remain speculative. One potential factor is the token's structure, which some believe amplifies volatility due to its low float and high FDV. A significant portion of MON tokens is allocated to the team (27%) and investors (20%), raising concerns about insider control. This concentration of tokens could lead to increased selling pressure, particularly after the airdrop, as insiders look to secure profits.
Adding to the uncertainty, Monad experienced a network spoofing incident shortly after its mainnet launch. Malicious actors created fake token transfers, spreading confusion and undermining user confidence. Monad co-founder James Hunsaker addressed the issue, alerting users to bogus transactions appearing to originate from his own wallet. These attacks exploited the ERC-20 standard and targeted users during the initial frenzy surrounding the mainnet launch.
Despite Hayes' bearish outlook and the network vulnerabilities, on-chain data reveals a more complex picture. CryptoQuant data indicates that whales have continued to accumulate MON tokens, even as Hayes publicly exited his position. One address reportedly withdrew 73.36 million MON, worth $3 million, from Gate.io. This divergence between market sentiment and whale activity highlights the conflicting forces currently influencing MON's price.
The Monad token has experienced significant volatility since its launch on November 25. After an initial surge, the price has since corrected, falling 15% to around $0.03. This decline is attributed to a combination of factors, including profit-taking by early investors, the network spoofing incident, and the overall risk-off sentiment in the crypto market.
While some analysts suggest that MON could slip below $0.02 and potentially retest the $0.01 range if selling pressure intensifies, Monad possesses some long-term potential. Its fast Layer-1 chain with EVM compatibility positions it among performance-focused blockchains. If the ecosystem expands and developers launch decentralized applications (dApps) on the network, MON could gradually recover.
Hayes, meanwhile, appears to have rotated his capital into other assets, including ENA, PENDLE, and ETHFI tokens, spending over $3 million. The market's reaction to Hayes' pronouncements underscores the influence of key figures in the crypto space, particularly on newly launched tokens. The combination of Hayes' warning, the network spoofing incident, and the inherent risks associated with new crypto assets suggests a cautious approach to Monad.
