Arthur Hayes says most L1s outside Ethereum and Solana are headed to zero

The flow of capital into spot Bitcoin and Ethereum ETFs has shown signs of recovery, marking the first week of net-positive inflows since October, following a prolonged period of outflows. This shift indicates a potential stabilization in institutional demand for these cryptocurrencies after a challenging month.

Ethereum developers are preparing for the Fusaka upgrade, the second significant upgrade of 2025, scheduled for December 3. This upgrade aims to enhance the network's capacity and efficiency, following the previous Pectra upgrade. The anticipation surrounding Fusaka is heightened by recent adjustments, including an increase in the block gas limit to 60 million.

The launch of Grayscale's spot Dogecoin ETF on November 24, 2025, was met with disappointing trading volumes, reaching approximately $1.4 million on its first day, significantly lower than analysts' expectations. This muted response reflects a lack of enthusiasm in the market despite the anticipation surrounding the first-ever Dogecoin ETF.

Ethereum's price has recently stabilized around $3,000 after a significant rebound in the broader cryptocurrency market, gaining 7.22% following a prolonged correction that saw its value drop from $4,700 to as low as $2,900. This recovery coincides with a notable decrease in open interest in Ethereum futures, which fell from $21 billion to approximately $17 billion in late November.

Ethereum's price has recently declined significantly, trading at around $3,000, which marks a nearly 40% drop from its peak this year. This downturn aligns with a broader crypto market crash, raising concerns about the stability of Ethereum as it approaches the Fusaka upgrade scheduled for December 3.

Arthur Hayes has raised concerns regarding Tether's investment strategy, particularly its significant exposure to Bitcoin and gold, which he warns could lead to substantial financial instability and undermine market confidence in the USDT stablecoin. This warning comes amid a backdrop of declining Bitcoin prices and recent downgrades from S&P Global Ratings, which cited similar vulnerabilities in Tether's financial practices.

Arthur Hayes, co-founder of BitMEX, has asserted that the cryptocurrency market is compelling traditional finance (TradFi) to evolve, particularly with the rise of equity perpetual contracts expected to dominate trading in 2026. He emphasizes that the integration of crypto into mainstream finance is no longer optional for traditional institutions.

Ethereum ETFs experienced significant outflows totaling $1.4 billion in November, reflecting a retreat by investors amid increasing caution and volatility in the cryptocurrency markets. This trend indicates a growing wariness among investors regarding the stability of Ethereum as a viable investment option.