The Peak of Stablecoin IPO Standards: Caution in the Cryptocurrency Market
Excitement and Risks in the Stablecoin IPO Frenzy
In the cryptocurrency community, the wave of welcoming stablecoin IPOs is causing a stir. This race attracts many retail investors eager to make quick profits from this lucrative market. However, experienced expert Arthur Hayes warns of potential risks. He believes this frenzy could have serious consequences if not careful, especially for individual investors lacking knowledge about the market.
Quality Assessment of IPO & Expert Rejection
In a recent article, Hayes specifically labeled Circle's IPO issuance as 'too expensive.' He believes this event reflects an impending financial bubble. The current stablecoin market mainly relies on Tether's USDT, a cryptocurrency playing a dominant role in global trading. Hayes warns that the explosion of unknown stablecoin issuing companies could lead to a major blast, causing significant losses for retail investors.
The Dominance of Tether and New Creators
Tether: The Global Dominator
Tether, with the USDT coin created in the 2010s through a strategic partnership with the Bitfinex exchange, has become a symbol of the stablecoin market. The USDT is popular in Asia, especially in countries with volatile local currencies or limited banking systems. Hayes asserts: 'Africa, Latin America, or underdeveloped regions still rely on USDT for currency circulation.' The convenience and high interoperability help USDT maintain its monopolistic position in the global cryptocurrency arena.
USDC and the Battle for Influence in Europe and the United States
Meanwhile, Circle's USDC is beginning to thrive in developed regions, particularly in the United States and Europe, thanks to its clean reputation and backing from giants like Coinbase. However, it still cannot directly compete with USDT in terms of coverage. Hayes sees that USDC builds a strategy of 'the U.S. as a safe haven,' but USDT's dominance remains unshaken even after more than a decade.
The Banking Sector and Major Competitors Gradually Taking Over the Market
Banks and Industrial Corporations: Advancing into the Stablecoin Market
The stablecoin market is currently witnessing a new wave of competition. Major banks are beginning to develop internal stablecoins to eliminate dependence on third-party issuers like Circle. In other words, they want to produce and manage internally, minimize risks, and share profits internally. Not only banks, but also tech giants like Amazon and Walmart are participating, expanding competition. Hayes warns that this shift could reduce opportunities for existing stablecoin companies to survive in the long term.
Expert Warnings for Investors
According to Hayes, if a stablecoin project claims to partner with traditional banks to scale, that is a warning sign. These alliances may no longer be relevant if internal banks venture into the market. Investors should stay alert, avoid getting swept up in the frenzy, and always carefully check the strategies of stablecoin projects before investing.
Predictions and Warnings About the Future of the Stablecoin Market
Predictions About the Market and the Risks of Falling
Although Circle has seen remarkable growth post-IPO, Hayes remains skeptical about the long-term sustainability of the stablecoins issued this time. He predicts that a significant correction may occur due to factors such as financial engineering, leverage, and temporary impressive performance, causing retail investors to lose billions of USD. The market may soon return to a state of equilibrium, but the aftermath will be serious.
Quick, Cautious Investment Timing
Nevertheless, Hayes believes that, in the short-term frenzy, there are still opportunities to profit. Stablecoins are rising in price, attracting the attention of retail investors. However, this excitement carries the risk of a bubble burst, which could cause significant losses for those who are not cautious. Investors need to prioritize caution when participating in this volatile cryptocurrency market.
Source: https://tintucbitcoin.com/arthur-hayes-canh-bao-bong-bong-stablecoin-sap-no/
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