Arthur Hayes Bets on Ethereum and Solana, Sidelines Monad in Crypto Portfolio: A Deep Dive into the BitMEX Co-Founder's Layer-1 Thesis
Introduction: A Veteran's Verdict on the Layer-1 Landscape
In the ever-evolving and often noisy world of cryptocurrency, the insights of seasoned veterans carry significant weight. Arthur Hayes, the outspoken co-founder of the pioneering crypto derivatives exchange BitMEX, recently delivered a stark and clear-eyed assessment of the layer-1 blockchain ecosystem. In a November 28 appearance on the Altcoin Daily podcast, Hayes cut through the hype surrounding a growing list of alternative base-layer blockchains, presenting a consolidation thesis that leaves little room for newcomers. His core argument is that only two networks—Ethereum and Solana—possess the institutional traction and foundational use cases necessary to endure in the long term. This perspective sidelines much-hyped new entrants, most notably the recently launched Monad, which Hayes dismissively categorized as destined for obsolescence. This article delves into Hayes' rationale, exploring why he is doubling down on crypto's established giants while issuing a sobering warning about the fate of other layer-1 contenders.
The Enduring Dominance of Ethereum
Hayes’s conviction in Ethereum is unwavering. He positions it not merely as a leading smart contract platform but as the foundational infrastructure for traditional finance's (TradFi) foray into Web3.
Institutional Adoption as a Moat Hayes argued that Ethereum’s role in institutional adoption is central to its durability. He stated, “Ethereum, this whole ecosystem, is going to be used by TradFi to achieve whatever they want to do within Web3…Ethereum is obviously winning and is going to keep winning.” This perspective highlights a critical factor in Ethereum's long-term value proposition: its establishment as the default choice for major financial institutions, corporations, and governments exploring blockchain technology. Firms like Franklin Templeton have already launched financial products on the Ethereum blockchain, cementing its status as the enterprise-grade network.
This institutional vote of confidence creates a powerful network effect that extends beyond price and into developer mindshare, security, and liquidity. While other chains may offer superior technical specifications in terms of speed or cost, Ethereum's first-mover advantage and its deeply entrenched ecosystem make it incredibly difficult to displace. Hayes’s view suggests that for large-scale, serious capital seeking exposure to decentralized finance and digital assets, Ethereum remains the primary and most trusted port of entry.
Solana’s Position as the Formidable Number Two
While Ethereum holds the crown, Hayes reserves a distinct and important spot for Solana as the only other layer-1 with similar staying power.
Resilience and the Search for a "New Trick" Hayes acknowledged Solana's remarkable rebound from its association with the FTX collapse, solidifying its position as the "number two largest L1." However, his optimism is tempered with a note of caution. He pointed out that the meme coin frenzy on Solana, which drove significant activity and attention in late 2023 and early 2024, has "petered out." This leaves the network at a crossroads, needing to find "new tricks" to fuel its next phase of growth.
“Solana needs a new trick. I don’t know what that new trick is, but again, it’s the number two largest L1. I think they’ll find something,” Hayes noted. This comment reflects a pragmatic view of the market. Solana has demonstrated robust technology capable of handling high throughput at low costs, attracting a vibrant community of developers and users. Yet, for sustained growth that outpaces mere speculation, it must cultivate more substantive use cases beyond meme coins. Despite this challenge, Hayes' inclusion of Solana in his core portfolio underscores a belief in its underlying technology and community's ability to innovate.
The Skeptical Stance on Monad and Other Layer-1s
If Hayes’s outlook on Ethereum and Solana is one of cautious optimism, his view on the rest of the layer-1 field is unequivocally bearish.
Monad: Dismissed as "Another High-FDV, Low-Float Piece of VC Lint" The launch of Monad this week, a new layer-1 blockchain marketing itself as a high-performance chain compatible with the Ethereum Virtual Machine (EVM), was met with immediate skepticism from Hayes. He rejected any characterization of it as the next "ETH killer," declaring instead that “pretty much every other L1 besides Ethereum or Solana is a zero and they’re not going to do very well.”
He described Monad specifically as “another bear chain” and delivered a grim prediction for its token (MON), stating it “is going to go down 99% because it’s another high-FDV, low-float piece of VC lint.” This critique targets a common model in recent crypto launches: a high Fully Diluted Valuation (FDV) with a small circulating supply (low float). This structure can allow venture capital (VC) backers to exert significant influence and potentially realize substantial profits early on, often at the expense of retail investors who enter at inflated valuations.
Hayes acknowledged buying some MON tokens himself, likely for speculative trading, but was quick to clarify that early price pumps do not equate to lasting value. “Every coin gets their first pump, and people want to believe in the new L1 because everybody wants to invest in the new Ethereum like they would have in 2014 when everyone missed it, me included. But again, that doesn’t mean that it’s going to actually have any real use case,” he emphasized. This highlights a critical distinction between short-term speculation and long-term investment based on fundamental utility.
Hayes’s Broader Crypto Portfolio Strategy
Beyond his specific layer-1 picks, Hayes provided a glimpse into his overarching investment framework.
A Concentrated Core with Strategic Satellites Hayes reiterated that his core thesis centers squarely on Bitcoin, Ethereum, and Solana. This trio represents his conviction in the most established and institutionally recognized assets in the crypto space. However, he noted that privacy-focused coin ZCash and the synthetic dollar protocol Ethena could round out his top-five list.
This portfolio construction reveals a clear hierarchy:
- Primary Holdings (Bitcoin, Ethereum, Solana): These are viewed as foundational bets with the highest probability of long-term survival and success.
- Secondary/Satellite Holdings (ZCash, Ethena): These represent more specialized or thematic bets within the broader ecosystem—privacy and yield-generation in this case—that complement but do not replace the core holdings.
This approach avoids over-diversification into what he perceives as risky and ultimately futile layer-1 alternatives, focusing capital on what he believes are the winning networks.
Strategic Conclusion: Navigating a Consolidating Market
Arthur Hayes’s commentary provides more than just a portfolio update; it offers a strategic lens through which to view the entire layer-1 competitive landscape. His thesis is one of market maturation and consolidation. Just as in earlier technological revolutions, a period of explosive innovation and experimentation is often followed by a shakeout where a handful of dominant platforms emerge victorious.
For crypto investors and observers, Hayes’s views underscore several key takeaways:
- Institutional Traction is Paramount: The ability to attract real-world use cases from established financial institutions is becoming a critical differentiator between enduring protocols and speculative projects.
- Beware of "VC Lint": The model of high-FDV, low-float launches backed by VCs requires extreme caution. Early price action can be misleading and may not reflect sustainable value.
- Focus on Networks with Proven Resilience: Both Ethereum and Solana have survived significant challenges—Ethereum through multiple market cycles and technological transitions, and Solana through a major existential crisis. This resilience itself is a valuable asset.
Looking ahead, readers should watch for signs validating or contradicting this consolidation thesis. Key metrics to monitor include institutional product announcements on various chains, developer activity trends beyond temporary hype cycles, and whether any new layer-1 can demonstrably carve out a unique, sustainable niche that neither Ethereum nor Solana can easily capture. In a market saturated with narratives, Hayes’s analysis serves as a reminder to prioritize fundamental utility and proven network effects over transient promises.