Author: Deep Tide TechFlow

David Hoffman tweeted in the early hours of May 21, 2026.

It was just one sentence: "Has the vibe on crypto Twitter really changed in the past two weeks, or did I just sell my last bit of ETH?"

David Hoffman is the co-founder of Bankless and one of the largest public evangelists for Ethereum over the past six years. He has written on his personal page that "99% of wealth is not in banks, but on Ethereum." This person has written "Ether: The Triple Point Asset" and is one of the core evangelists defining ETH as "ultrasound money."

Now he has liquidated.

If last year some regarded ETH as a "bond of the future world" and SOL as the "high-speed Nasdaq," by May 2026, the market has voted with prices to complete a thorough disbelief. ETH is struggling around $2,100, having halved from the high of $4,946 in August 2025.

Meanwhile, in the same market, HYPE is just one step away from its historical high of $59.39, having risen 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 squeezed into the top 20.

One market, two weathers.

Once High-End Liquor

This is not 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-shares of 2020.

From the second half of 2020 to the beginning of 2021, A-shares peaked and fell back as liquidity dwindled, forcing public funds to make a choice: either spread their positions equally across over 3,000 stocks and accept mediocre β returns, or concentrate their firepower on a few core assets that could articulate future cash flows. In the end, everyone chose the latter. The result was that Moutai and Wuliangye were lifted to the sky, while other stocks were thrown into "garbage time" by the market.

That year, there was a very precise phrase called "core asset herd." Its essence is not a conspiracy among fund managers, but rather an inevitable response in an environment of reduced liquidity, when the water in the pool gets lower, all the fish swim to the deepest corner.

The crypto market is now swimming toward that deepest corner.

What happened in the past year? Bitcoin ETFs attracted about $70 billion in funds from 2024 to 2025, turning Bitcoin into a "subject priced by Wall Street," but this also means that Bitcoin's marginal buying pressure has begun to be constrained by macro rates and stock market risk appetite. The anticipated inflation data for Q1 2026 combined with a $1 billion net outflow from ETFs in a single week made the entire market shudder.

What’s worse is the collapse of the narrative side. Citi cut its 12-month target price for ETH from $4,304 to $3,175 in early 2026, citing "stagnation in market structure legislation and a weakening of on-chain activity"; JPMorgan stated more bluntly in its report on May 19, "ETH needs stronger network growth and DeFi adoption to reverse its weakness relative to Bitcoin." The short research firm Culper Research even openly shorted ETH and released a short report pointing out that the Fusaka upgrade weakened the burn mechanism of EIP-1559, making ETH lose its previous deflationary attributes.

Solana has fallen into a different dilemma. It remains the best chain for DePIN, Meme coins, and on-chain trading experiences, but when the market enters a risk-averse phase, its biggest past asset, "high β," 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 heavily bought Zcash.

This is a symbolic moment, as Solana's earliest major backer begins to shift faith to another chain.

Herding HYPE and ZEC

So where did the funds go?

The answer is surprisingly consistent: HYPE and ZEC.

The story of Hyperliquid actually began with the nearly perfect airdrop in November 2024. This team, led by Jeff, a Harvard graduate, and Iliensinc, with backgrounds from Caltech/MIT/Citadel/Hudson River Trading, accomplished something that almost no one in the crypto circle has done in the past decade, distributing 76% of the tokens to users, with no VC shares.

If you only saw this, you only saw its "moral story." What really allowed HYPE to rise against the current during the liquidity drought of 2026 is its "cash flow story."

Hyperliquid is not a traditional "narrative token." It is a complete chain; more accurately, it is 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 reached an agreement with Circle for a 90% revenue share from USDC reserves, which alone can contribute $135 million to $160 million in cash flow annually for token buybacks; this week (May 19), Bitwise announced it would include HYPE on its balance sheet while launching a HYPE-based ETF product.

The current open interest of HYPE contracts stands at $2.1 billion, with funding rates turning positive, indicating that new bullish capital is continuously entering, rather than a false prosperity created by squeezed shorts.

The story of ZEC belongs to a completely different dimension. It is not a "cash flow story;" it is a "fear story."

Arthur Hayes stated directly in his latest essay in January, "This year's dominant narrative is privacy, and ZEC will become a privacy beta. To outperform Bitcoin and Ethereum, I will sell BTC to fund my privacy position." His fund, Maelstrom, began accumulating positions in Q3 2025.

Then in early May, Tushar Jain from Multicoin Capital publicly increased his stake at Consensus. CoinDesk labeled ZEC in its March research as "encryption supremacy," indicating that privacy networks have become a dominant infrastructure. The underlying logic chain is the simultaneous layering of three things: AI starting to have the capability to batch anonymize user identities on transparent chains, quantum computing threats injecting long-term uncertainty into existing wallet encryption systems, and on-chain quarterly transaction volumes breaking through $100 billion for the first time turning "wealth observed by the entire network" into a real fear.

The percentage of the supply locked in ZEC’s shielded addresses has reached 30%, a historic high, indicating that real privacy demand has quantifiable evidence on-chain, no longer merely a literary narrative. The SEC officially closed its over two-year investigation into the Zcash Foundation on May 20, without any enforcement recommendations. Robinhood has already launched ZEC, and Grayscale's ZEC ETF is expected to be moved to the forefront.

Hayes predicts that ZEC's market cap will eventually reach 10% of Bitcoin's, corresponding to the token price being 15-20 times its current state.

Herding Collapse?

When will the herd break?

The A-share liquor herd broke after the Spring Festival in 2021. The breaking point was not fundamental deterioration but a shift in central bank policy, with the market returning from stock game to incremental game. When the water in the pool starts to increase, all the fish no longer need to squeeze into the deepest corner.

When will the pool in the crypto world increase? It depends on when the Federal Reserve lowers interest rates, when ETF funds flow back, when the market cap of stablecoins reaches new highs, and when traditional finance moves more money onto the chain.

But another possibility needs to be warned against: the herd may also collapse due to being "too tightly knit." The open interest of ZEC contracts surged 40% in the past 24 hours to $1.3 billion; this concentration itself is a risk signal. Hayes, Multicoin, retail investors, Robinhood retail users, all crowded into the same trade means that any marginal buyer's exit could trigger a chain of long liquidations. The funding rate of HYPE has turned positive and is continuously rising, accumulating financing costs.

The end of the herd is either rising water lifting all boats, allowing everyone to profit together; or a stampede escape, with the last person entering taking all the chips.

Which stage are we in now? No one can provide a definite answer. But there is one question worth every person reading this article to ask themselves,

If even David Hoffman has sold, the ETH still in your wallet, are you holding it because you believe in it, or have you just forgotten it’s there?

The next question is more practical: when a market has only two names to herd, what will the third name be? Aave? Maker? Some yet undiscovered privacy L2? A high-performance chain that has not issued tokens yet?

Those who can clarify this question will become the early entrants into the next round of herding.

Those who cannot clarify it will become the last holders when the next round of herding breaks.