Warning from the founder of BitMEX about the New Stablecoin Market

Risks from new stablecoin issuers

The founder of BitMEX warns that the majority of new stablecoin issuers will face overvaluation. These projects are vulnerable due to tightly locked distribution channels, leading to a high likelihood of failure. The stablecoin market today is witnessing a massive influx of new tokens, but most lack a solid ecosystem as well as appropriate risk management processes. The 'overvalued' status not only reduces user trust but also increases the risk of collapse when it cannot maintain attractiveness and real value.

### The challenge of locked distribution channels

New stablecoins often rely on limited distribution channels for issuance and liquidity maintenance. If these channels are blocked or tightly controlled, issuers will struggle to expand transactions. This limits the new tokens' ability to reach a wide investment audience, thus reducing liquidity and competitiveness in the cryptocurrency market. In the context of an increasingly competitive cryptocurrency ecosystem, stablecoin projects need to build more flexible and sustainable distribution systems to avoid collapse in the long term.

### Update on trends and investment warnings

Investors need to be cautious with overly speculative stablecoin projects. Only prioritize tokens with clear controls, a solid ecosystem, and the ability to maintain tight legal controls. The discrepancies in value and substance of new stablecoins can pose significant risks, harming long-term portfolios. The market needs projects that can adapt and innovate in maintaining distribution channels, to limit the inherent weaknesses of newly launched stablecoins. Only projects with clear strategies can withstand the fierce competitive wave.

Source: https://tintucbitcoin.com/arthur-hayes-khuyen-giao-dich-stablecoin-ipo-nhiet-huyet/

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