Author: Deep Tide TechFlow

David Hoffman posted a tweet in the early morning of May 21, 2026.

Just one sentence: "Has the atmosphere on crypto Twitter really changed in the past two weeks, or is it just that I sold my last bit of ETH?"

David Hoffman is the co-founder of Bankless and one of the biggest public evangelists for Ethereum over the past six years. He once wrote on his personal page, "99% of wealth isn't in banks, it's on Ethereum." He is the author of *Ether: The Triple Point Asset* and is one of the core preachers of the narrative that defines ETH as "ultrasonic money."

He's cleared out his inventory now.

If last year some people still regarded ETH as "bonds of the future world" and SOL as "a high-speed Nasdaq," then by May 2026, the market had already voted with prices to completely dispel those beliefs. ETH is currently struggling around $2,100, more than half the high of $4,946 in August 2025.

In the same market, HYPE is just one step away from its all-time high of $59.39, up 15% in the past seven days; ZEC has more than doubled in the past month, with a year-to-date increase of over 1400%, and its market capitalization has squeezed into the top 20.

One market, two different weathers.

Baijiu (Chinese liquor)

This isn't the first time the crypto world has seen such a divide. But you need to temporarily shift your focus away from the screen and back to the A-share market in 2020.

From the second half of 2020 to the beginning of 2021, liquidity in the A-share market peaked and declined, forcing mutual funds to make a choice: either spread their holdings evenly across more than 3,000 stocks and accept mediocre beta returns, or concentrate their resources on a few core assets with clearly defined future cash flows. Everyone ultimately chose the latter. As a result, Moutai and Wuliangye were driven sky-high, while the remaining stocks were relegated to a period of stagnation.

That year, there was a very precise saying: "core assets clustering together." Its essence was not that fund managers were conspiring, but rather an inevitable reaction in an environment of tightening liquidity. When the water in the pool decreases, all the fish will swim to the deepest corner .

The crypto market is now swimming towards that deepest corner.

What happened in the past year? Bitcoin ETFs absorbed approximately $70 billion in funds in 2024-2025, turning Bitcoin into a "target priced by Wall Street." However, this also means that marginal buying of Bitcoin began to be constrained by macro interest rates and stock market risk appetite. Q1 2026 inflation data exceeded expectations, coupled with a net outflow of $1 billion from ETFs in a single week, causing the entire market to tremble.

Even more critically, the narrative has collapsed. Citi cut its 12-month price target for ETH from $4,304 to $3,175 in early 2026, citing "stagnant market structure legislation and weakening on-chain activity." JPMorgan's report on May 19th was even more direct, stating that "ETH needs stronger network growth and DeFi adoption to reverse its relative weakness against Bitcoin." Short-selling research firm Culper Research even publicly shorted ETH, releasing a report pointing out that the Fusaka upgrade weakened the EIP-1559 burning mechanism, rendering ETH devoid of its previous deflationary properties.

Solana, however, has fallen into a different predicament. It remains the chain with the best DePIN, Meme coin, and on-chain transaction experience, but as the market enters a period of risk aversion, its biggest asset in the past, "high beta," has instead become a liability. Tushar Jain of Multicoin, the man who once carried Solana out of the ruins, publicly announced at Consensus Miami in May that Multicoin had made a significant purchase of Zcash.

This is a landmark moment, as Solana's earliest and largest donors begin to transfer their faith to another chain.

HYPE and ZEC join forces

So where did the money go?

The answers were surprisingly consistent: HYPE and ZEC.

The story of Hyperliquid was actually foreshadowed by that near-perfect airdrop in November 2024. Led by Harvard alumni Jeff and Iliensinc, and with a team from Caltech, MIT, Citadel, and Hudson River Trading, this team did something almost no one in the crypto world had accomplished in the past decade: distributing 76% of its tokens to users, with no VC funding whatsoever .

If you only see that, you only see its "moral story." What truly allowed HYPE to buck the trend and rise during the liquidity crunch of 2026 was its "cash flow story."

Hyperliquid is not a "narrative token" in the traditional sense. It is a complete chain, or more accurately, a high-speed on-chain ATM: as the largest decentralized perpetual contract exchange, it generates over $1.2 billion in protocol revenue annually; it has an agreement with Circle to share 90% of USDC reserve revenue, which alone contributes $135 million to $160 million in cash flow annually for token buybacks; this week (May 19), Bitwise announced the addition of HYPE to its balance sheet and launched an ETF product based on HYPE.

HYPE's contract open interest is currently at $2.1 billion, and funding rates have turned positive, which means that new long funds are continuously entering the market, rather than a false boom caused by a squeeze on short positions.

ZEC's story belongs to a completely different dimension. It's not a "cash flow story," it's a "fear story."

In his latest essay in January, Arthur Hayes put it bluntly: "The dominant narrative this year is privacy, and ZEC will be the privacy beta. To outperform Bitcoin and Ethereum, I will sell BTC to fund my privacy position." His fund, Maelstrom, began building its position in Q3 2025.

Then, in early May, Tushar Jain of Multicoin Capital publicly increased his bet on Consensus. CoinDesk, in a March research report, labeled ZEC "encryption supremacy," meaning that privacy networks have become a dominant infrastructure. The underlying logic involves three overlapping factors: AI's ability to deanonymize user identities on transparent blockchains in bulk; the threat of quantum computing creating long-term uncertainty for existing wallet encryption systems; and on-chain quarterly transaction volume exceeding $100 billion for the first time, turning "wealth viewed by the entire network" into a real fear.

The locked supply of ZEC in shielded addresses has reached 30%, an all-time high, meaning there is quantifiable evidence of genuine privacy needs on the blockchain, rather than just a literary narrative. The SEC officially closed its more than two-year investigation into the Zcash Foundation on May 20th without making any enforcement recommendations. Robinhood has already listed ZEC, and Grayscale's ZEC ETF is expected to be in the spotlight.

Hayes predicts that ZEC's market capitalization will eventually reach 10% of Bitcoin's, corresponding to a token price 15-20 times higher than it is now.

The alliance is crumbling?

When will this alliance break down?

The rally in A-share liquor stocks collapsed after the 2021 Spring Festival. The catalyst wasn't a deterioration in fundamentals, but rather a shift in central bank policy, turning the market from a zero-sum game to a new one. As the pool fills up, no fish need to crowd into the deepest corner anymore.

When will the pool of funds in the crypto world increase? It depends on when the Federal Reserve cuts interest rates, when ETF funds flow back in, when stablecoin market capitalization reaches a new high, and when traditional finance moves more money onto the blockchain.

However, another possibility to be wary of is that this clustering could collapse due to "too tight a grip." ZEC's open interest surged 40% to $1.3 billion in the past 24 hours, and this concentration itself is a risk signal. Hayes, Multicoin, retail investors, and Robinhood retail users are all crowding onto the same trade, meaning that any marginal exit of buying could trigger a chain reaction of long squeezes. HYPE's funding rates have turned positive and continue to rise, with financing costs piling up.

The end result of group buying is either a rise in prices where everyone profits and cashes out, or a stampede-like exodus where the last person to enter takes all the chips.

Where are we now? No one can give a definitive answer. But there's one question that everyone reading this article should ask themselves:

If even David Hoffman has sold his ETH, is the ETH still in your wallet because you believe in it, or because you've forgotten it's there?

The next question is more practical: when a market only has two names left to form alliances, what will the third name be? Will it be Aave? Maker? Some undiscovered privacy-focused L2 blockchain? Some high-performance blockchain that hasn't yet issued its own token?

Those who figure this out will be the first to join the next round of alliances.

Those who can't figure things out will be the last ones left holding the bag when the next alliance breaks down.

隐私技术公司Nym计划于2024年初推出“去中心化VPN”

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