According to former BitMEX founder Arthur Hayes, Circle’s June 5 IPO has sparked what he calls “stablecoin mania.” He warns that this is only the beginning. Many new issuers will rush to go public. Most of them, he predicts, won’t last. Surge Of Copycat Stablecoin Listings Hayes points out that after Circle’s shares jumped by more than 80% since listing, hitting just under $165 on June 16, everyone will want a piece of the action. He expects a wave of “Circle copycats” to emerge. These firms will use clever presentations and big promises to grab attention. Investors may pile in, driving prices even higher at first. Treat It Like A Hot Potato Based on Hayes’s colorful advice, traders should handle these stocks like a hot potato . He says you don’t want to hold them for long. The frenzy could lift prices sharply, but once confidence cracks, everyone will race to dump shares—just like passing along something too hot to keep. Risks And Overvaluation Hayes argues that many of these new public firms are already overvalued. They’ll offer high rates to attract depositors or spend huge sums on marketing. At some point, the balance sheets won’t add up. That’s when the bubble bursts and stocks plunge. He also cautions against betting on a sudden collapse by shorting. He says pro-crypto sentiment in the US and the mania narrative will keep prices buoyant, at least for a while. Distribution Channels Locked Up Hayes identifies only three clear paths to reach customers: crypto exchanges, big social media platforms, and established banks. Without deals in place, newcomers will struggle. Exchanges will demand hefty listing fees. Social networks may build their own tokens instead of hosting outsiders. Banks could also launch in‑house stablecoins , cutting out new entrants. For anyone else, success chances are slim. Regulation Fuels The Fire Based on reports, the US Senate is set to vote on key stablecoin rules on June 17. If it passes, Hayes says that will add fuel to the fire. Chainlink co‑founder Sergey Nazarov echoed that view on Tuesday, noting that clear rules will encourage even more issuers around the world. Yet Hayes warns that easier regulation won’t solve the core problem of finding real users. Circle’s Price Tag Under Scrutiny According to Hayes, Circle itself isn’t immune. He calls its current valuation “insane,” noting the company gives up half of its interest income to Coinbase for custody services. Still, he believes CRCL shares will keep levitating until a true market correction sets in. Featured image from Unsplash, chart from TradingView