Arthur Hayes says he expects dollar-pegged stablecoins to become the conduits for tens of trillions of onchain capital, which will boost the DeFi market.
In a blog post on Tuesday, the chief investment officer at Maelstrom identified three protocols in particular: Ether.fi, Ethena, and Hyperliquid. Their token prices will soar as $34 trillion in capital inflows from eurodollar and Global South deposits flood the stablecoin market, he argued.
For Ether.fi, Hayes predicted a 34-fold price increase for the DeFi yield protocol, driven by user appetite for its debit card product. Demand for interest-bearing stablecoins offered by Ethena and decentralised derivatives trading on Hyperliquid would trigger a 51-fold and 126-fold uptick in their respective token prices, according to Hayes.
The predictions suggest gargantuan upside for these DeFi protocols, but it hinges on transformative regulatory and technological shifts, as well as swift adoption — factors that aren’t assured.
These predictions rely on non-US banks losing implicit access to US Treasury support, which could force depositors to move to dollar-pegged stablecoins.
They also require tech platforms to integrate stablecoin payments in the Global South, while regulators in those countries fail to enact strict capital control laws to prevent capital flight.
Hayes is also a vocal supporter and backs some of the very projects touted in his essay.
Still, the $280 billion stablecoin market is one of the hottest crypto sectors right now. Even if Hayes’ predicted financial migration of epic proportions is a little far-fetched, analysts expect further expansion for the market.
Earlier in August, analysts at crypto investment company Keyrock and cryptocurrency exchange Bitso predicted that stablecoins could account for 12% of global cross-border payment volumes by 2030.
That’s a lofty target for stablecoins, considering that they made up less than 3% of the $195 billion in global remittances last year.
Coinbase even forecasts that stablecoins will reach $1.2 trillion in market size by 2028, a 330% uptick in the next three years.
Stablecoin issuers are now scrambling to create their own blockchains to snap up a larger chunk of the transaction fees generated by the market as it expands.
Market commentators like Ben Reynolds, managing director of crypto infrastructure company BitGo, say launching a stablecoin chain gives the issuer “more control over settlement and compliance.”
