Arthur Hayes Uses 100 Years of Stock Data to Predict Crypto Graveyard – 99% Failure

• New data reveals 3% of US stocks created the net wealth since 1926
• Over half of all stocks lost money or lagged safe Treasury bills over 96 years
• Arthur Hayes connects stock market concentration to why most crypto assets likely fail

BitMEX co-founder Arthur Hayes delivered a stark warning for crypto investors, pointing to startling new research on the U.S. stock market as evidence. “99% of all shitcoins are zeros in waiting,” Hayes declared on X, reacting to data showing extreme wealth concentration where nearly all long-term stock market gains came from a tiny fraction of companies. 

His comment draws a brutal parallel: the vast majority of crypto assets, like most stocks throughout history, are likely destined for failure.

The data, based on research by Professor Hendrik Bessembinder, shows that almost all shareholder wealth generated since 1926 came from a fraction of listed companies, a pattern Hayes compared to the structure of the crypto market.

3.44% of Stocks Created ALL Wealth Since 1926

According to the analysis, just 3.44% of all U.S.-listed companies created 100% of net shareholder wealth between 1926 and 2022. The remaining 97% either matched or underperformed Treasury-bill returns over the same period. The top 1.88% of firms accounted for 90% of total market gains, while 1.13% produced 80%, showing how rare long-term outperformers have been.

The concentration sharpens dramatically at the top: the best-performing 1.88% of firms accounted for 90% of wealth creation, and a mere 0.26%, roughly 90 individual companies out of over 26,000 studied, were responsible for half of all net value generation.

Hayes Reaction: Stock Data Proves “99% of Shitcoins are Zeros”

The same dataset shows that more than half of all U.S. stocks ultimately lost money, while about four in seven underperformed Treasury bills. 

The pattern displays how most listed companies have historically delivered limited or negative long-term returns. Analysts note that these findings explain why broad market exposure often outperforms limited stock selection over extended periods.

Power Law Dynamics: Market Concentration Across Stocks and Crypto

Hayes’ comment effectively highlights that both traditional equities and digital assets appear governed by power law distributions. Success isn’t evenly spread; it concentrates dramatically among a select few. 

While the crypto market is much younger, its structure already reflects this, with Bitcoin and Ethereum commanding a huge share of the total market capitalization and attention.