Author: Deep Tide TechFlow
David Hoffman tweeted at dawn on May 21, 2026.
Just one sentence: "Has the vibe on Crypto Twitter genuinely shifted over the last two weeks, or have I just sold my last ETH?"
David Hoffman is the co-founder of Bankless, one of Ethereum's biggest public evangelists over the past six years. He once wrote on his personal page, "99% of wealth isn't in banks, it's on Ethereum." This is the man who authored "Ether: The Triple Point Asset" and was a core missionary in the narrative that defined ETH as "ultrasound money."
Now, he has cleared his position.
If last year some still viewed ETH as "the bond of the future world" and SOL as "a high-speed Nasdaq," by May 2026, the market had voted with its prices to complete a thorough de-faithing. ETH is currently struggling around $2,100, halved from its peak of $4,946 in August 2025.
Yet, in the very 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 cap has already squeezed into the top 20.
One market, two different climates.
The Former Baijiu
This isn't the first time such a split has appeared in the crypto world. But you need to temporarily look away from the screen and return to the A-share market in 2020.
From the second half of 2020 to early 2021, A-share liquidity peaked and receded, forcing mutual funds to make a choice: either spread their positions evenly across over 3,000 stocks and accept mediocre beta returns, or concentrate their ammunition on a handful of core assets with clear future cash flow stories. Everyone ultimately chose the latter. The result was that Moutai and Wuliangye were lifted to the sky, while the rest of the stocks were thrown into "garbage time" by the market.
That year, there was a very precise term called "core asset huddling." Its essence wasn't fund managers colluding, but an inevitable reaction in an environment of contracting liquidity. When the water in the pool shrinks, all the fish swim to the deepest corner.
The crypto market is now swimming towards that deepest corner.
What happened in the past year? Bitcoin ETFs absorbed roughly $70 billion in funds from 2024-2025, turning Bitcoin into an "asset priced by Wall Street." But this also means Bitcoin's marginal buying power began to be constrained by macro interest rates and stock market risk appetite. Q1 2026 inflation data exceeded expectations, coupled with a single-week net outflow of $1 billion from ETFs, causing the entire market to tremble.
What's more critical is the collapse of the narrative side. Citi cut its 12-month target price for ETH from $4,304 to $3,175 at the beginning of 2026, citing "stalled market structure legislation and weakening on-chain activity"; JPMorgan stated more bluntly in a May 19 report, "ETH needs stronger network growth and DeFi adoption to reverse its weakness relative to Bitcoin." The short-selling research firm Culper Research even publicly shorted ETH and released a report claiming that the Fusaka upgrade weakened the burn mechanism of EIP-1559, stripping ETH of its previous deflationary properties.
Solana is caught in another dilemma. It remains the best chain for DePIN, meme coins, and on-chain transaction experience, but when the market enters a risk-averse period, its greatest asset in the past, "high beta," ironically becomes a liability. Tushar Jain from Multicoin, the man who once carried Solana out of the ruins, publicly announced at Consensus Miami in May that Multicoin had taken a significant long position in Zcash.
This is a landmark moment. Solana's earliest and largest financial backer began shifting faith to another chain.
Huddling Around HYPE and ZEC
So, where did the money go?
The answer is surprisingly consistent: HYPE and ZEC.
The story of Hyperliquid was actually foreshadowed from the almost perfect airdrop in November 2024. The team, led by Harvard alumni Jeff and Iliensinc with backgrounds from Caltech/MIT/Citadel/Hudson River Trading, did something almost no one in crypto had managed in the past decade: distributing 76% of the tokens to users, with zero VC allocation.
If you only see this, you only see its "morality story." What truly propelled HYPE to rise against the trend during the liquidity drought of 2026 is its "cash flow story."
HYPE is not a traditional "narrative token." It is a complete chain, more accurately, a high-speed on-chain ATM in operation: as the largest decentralized perpetual contract exchange, it generates over $1.2 billion in annual protocol revenue; it has an agreement with Circle to share 90% of the USDC reserve yield, a stream alone contributing $135 to $160 million annually to token buybacks; this week (May 19), Bitwise announced adding HYPE to its balance sheet and launched an ETF product based on HYPE.
HYPE's contract open interest currently stands at $2.1 billion, and the funding rate has turned positive, indicating that new long-side capital is continuously entering, not a false prosperity from short squeezes.
The story of ZEC belongs to a completely different dimension. It's not a "cash flow story"; it's a "fear story."
Arthur Hayes wrote directly in his January essay, "This year's dominant narrative is privacy, and ZEC will be the privacy beta. To outperform Bitcoin and Ethereum, I will sell BTC to fund my privacy positions." His fund, Maelstrom, started building positions from Q3 2025.
Then, in early May, Multicoin Capital's Tushar Jain publicly doubled down at Consensus. CoinDesk's March research labeled ZEC with the tag "encryption supremacy," meaning privacy networks have become a dominant infrastructure. The underlying logic chain is the simultaneous convergence of three factors: AI gaining the ability to deanonymize users en masse on transparent blockchains, the threat of quantum computing creating long-term uncertainty for existing wallet encryption systems, and on-chain quarterly trading volume surpassing $100 billion for the first time, turning "wealth visible to the entire network" into a real fear.
The proportion of ZEC supply locked in shielded addresses has reached 30%, a historical high, meaning real privacy demand has quantifiable evidence on-chain, no longer just a literary narrative. The SEC officially closed its over-two-year investigation into the Zcash Foundation on May 20 without proposing any enforcement action. Robinhood has already listed ZEC, and expectations for a Grayscale ZEC ETF are being pushed to the forefront.
Hayes predicts ZEC's market cap will eventually reach 10% of Bitcoin's, corresponding to a token price 15-20 times above current levels.
Will the Huddle Dissolve?
When will the huddle break?
The A-share baijiu huddle broke after the Lunar New Year in 2021. The trigger wasn't deteriorating fundamentals, but a shift in central bank policy, turning the market from a zero-sum game back to a game of incremental funds. When the water in the pool starts to rise, all the fish no longer need to cram into the deepest corner.
When will the crypto world's pool expand? That depends on when the Fed cuts rates, when ETF funds flow back in, when stablecoin market cap hits new highs, and when traditional finance moves more money on-chain.
But one must also be wary of another possibility: the huddle could collapse under its own weight from becoming "too tight." ZEC's contract open interest surged 40% in the past 24 hours to $1.3 billion. This concentration itself is a risk signal. Hayes, Multicoin, retail traders, Robinhood users—everyone crowding into the same trade means the exit of any marginal buyer could trigger a chain reaction of long liquidations. HYPE's funding rate has turned positive and continues to rise, building up financing costs.
The endgame of a huddle is either a rising tide lifts all boats, and everyone takes profits together; or a stampede for the exit, with the last person in taking all the chips.
At which stage are we now? No one can give a definitive answer. But one question is worth asking for everyone reading this article:
If even David Hoffman has sold, the ETH still in your wallet—do you hold it because you believe in it, or because you forgot it was there?
The next question is more practical: When a market has only two names left to huddle around, what will the third name be? Aave? Maker? Some undiscovered privacy L2? Some high-performance chain yet to issue a token?
The person who figures this out will be the first to join the next huddle.
The person who doesn't will be the last to hold the bag when the next huddle breaks.
