Hayes warns that most altcoins will not recover due to the product-market fit.
The founder of BitMEX believes Ethereum is a potentially superior option despite current negative sentiment.
Tokens with high FDV backed by venture capital are at risk of crashing without sustainable revenue models.
BitMEX co-founder Arthur Hayes warned of a bleak future for the altcoin market, stating that 'most of them are likely not going to grow in price again' due to fundamental structural issues plaguing this space. In a recent podcast with Bonnie Blockchain, Hayes explained the grim outlook stemming from a prevailing lack of product-market fit among altcoins and their inability to generate meaningful revenue for token holders.
Hayes sharply criticized high fully diluted valuations of low-turnover tokens backed by venture firms, calling them 'VC shitcoins' that barely cover their losses. According to Hayes, such ventures are doomed as they lack real customers who pay for their platforms. He mentioned that this makes it nearly impossible to sustain price growth over time.
🎯 ARTHUR HAYES 'ALL YOUR ALTCOINS, MOST OF THEM ARE PROBABLY NOT GONNA GO UP IN PRICE AGAIN.'
Father of perpetual contracts Arthur Hayes: 'I think most of the altcoins you hold are probably not going to rise!'
📍FULL EPISODE: https://t.co/sioaN9ky4Z@CryptoHayes @davidlin_TV @BlockBonnieC pic.twitter.com/U6AsMv6uyB
— Bonnie Blockchain (@BlockBonnieC) June 16, 2025
Ethereum may break the trend despite current market sentiment
Despite his bearish view on altcoins in general, Hayes identified Ethereum as a potential exception that could outperform in the current cycle. His contrarian stance stems from his observation of widespread negative sentiment around $ETH , when most investors were disdainful of the currency. Hayes felt that such entrenched negativity would provide opportunities for those willing to bet against prevailing market sentiments.
The analysis emerged as #Ethereum faced criticism on all fronts, including network congestion, high transaction fees, and competition from other layer 1 blockchains. However, Hayes believes that such bearish sentiment may have pushed ETH to oversold levels, providing opportunities for outperformance if the market environment changes.
Successful altcoins must have value
Hayes emphasized that successful altcoin projects must have a clear value proposition where protocol revenue is returned to token holders. He cited projects such as $PENDLE and $ETHFI as having genuine product-market fit, allowing them to stay afloat. Hayes contrasted them with hyper-promoted projects that attracted huge funding rounds without creating sustainable business models.
He extended this criticism to firms that achieved sky-high valuations solely through fundraising, without backing it up with real user or revenue growth. Hayes noted that it's hard to deliver a 10x return if you start with valuations in the billions and lack corresponding fundamental growth, making it 'very difficult to go from 5 to 50' billion in market capitalization.
This situation has led Hayes to describe as 'only a decline' the performance for many recent launches. This includes long-awaited projects that have struggled after completing their initial hype cycles. This pattern suggests that venture capital support alone cannot sustain a cryptocurrency's valuation without underlying utility and adoption.
