Arthur Hayes: Treat VC-backed high FDV, low circulation projects with caution

Arthur Hayes has published a new article, providing a detailed analysis of the development trends in the cryptocurrency market and reasons why ICOs (Initial Coin Offerings) may return to the market.

Since the retreat of the ICO wave in 2017, capital formation methods in the crypto market have gradually deviated from their original paths. Tokens supported by VCs did not perform as expected during this bull run, with new tokens underperforming mainstream currencies by nearly 50% in 2024. At the same time, models with high FDV (Fully Diluted Valuation) and low circulating supply failed to meet retail investors' needs.

Hayes believes that ICO model has significant advantages. Modern frameworks support rapid token issuance and trading, offering good timeliness; The development of DEX provides ample trading environment and liquidity for projects; while lowering entry barriers for using crypto wallets and improving blockchain performance greatly enhances user experience.

For project parties and investors, Hayes suggests caution towards VC-backed projects with high FDV and low circulation volume. He also warns against overvalued tokens listed on CEX. He particularly emphasizes not to easily accept views claiming that trading behavior is "irresponsible", but rather make judgments based on actual market conditions.