Co-founder of BitMEX, Arthur Hayes, has criticized the current state of the crypto market. In his latest article, he is calling on retail investors to shun VC-backed tokens with inflated valuations and low liquidity. He also targeted CEXs for focusing on their own metrics irrespective of user interests.
He called out EOS, which he described as the most destructive ICO of 2017. Having raised $4.1 billion, EOS has since faded into obscurity to become the cautionary tale of overhyped projects.
The three drivers behind crypto’s rise
He added that crypto’s rise was propelled by three factors: decentralization taking on big institutions, Bitcoin’s revolutionary technology, and greed driving adoption. Yet, the industry has strayed from its roots. ICOs once empowered users, while VC-backed projects now dominate, often at the expense of retail investors.
The pattern is clear: VC coins go in at high valuations and fail to perform versus major assets. Meanwhile, exchanges compound the problem by dumping tokens into a thinly traded market, with retail investors left holding the bag.
In contrast, Hayes pointed to memecoins as a far more inclusive alternative. These tokens thrive on virality and are never subject to the same kind of gatekeeping as VC-backed projects.
Memecoins are the crystallization of internet culture, giving retail traders the ability to speculate without the friction of institutions. Success is based entirely on memetic value and encourages user interaction at the very least cost. While very risky, they democratize access to give anyone a shot at creating wealth.
Crypto liquidity: the rise of decentralized platforms
Hayes made the case for a resurgence in ICOs, which cut out VCs and CEXs altogether, allowing creators to raise directly from the community. That process is much easier today with new tools and DEXs letting projects launch quickly.
Projects such as Solana-based Pump.fun and Aptos’ low-gas network could be among the first to lead the charge. Moreover, to retail investors, Hayes says that avoid VC coins that are selling at a premium; look for actual innovation and community support. The next bull run will be all about bold risk.
