In the first quarter of 2026, the fund Maelstrom managed by BitMEX co-founder Arthur Hayes essentially hit the "pause button" — maintaining a No Trade Zone state for the entire quarter, with only a slight increase in the position of Hyperliquid(HYPE) long in the portfolio. In stark contrast to this extreme restraint was the local climax dazzling on the surface: the market lacked a clear direction, mainstream coin trends were vague, but sectors like Meme, DeSci, and prediction markets showcased repeated surges and drops, with short-term fluctuations jumping several times. While surface prices were tumultuous, underlying capital was collectively contracting and observing, clearly splitting the crypto market in the first quarter — on one side were institutions like Maelstrom preferring to stay uninvested, and on the other were retail investors and high-frequency players reveling around local hotspots.

Founders Stepping Back: Maelstrom's No Trade Quarter

Throughout the first quarter of 2026, public information indicated that Maelstrom had basically no new active trades, remaining in a state referred to as "No Trade Zone", only maintaining existing positions and hedging risk. According to multiple sources like Rhythm, Jinse Finance, and Planet Daily, this choice of "almost zero trading" was not a passive halt but a deliberate contraction by Hayes regarding the current market structure — in his view, the current crypto market "lacks a clear trend." Trend funds choose to reduce their trading frequency to protect their ammunition. The term "lacks a clear trend" does not mean prices are not fluctuating, but rather that directional signals are canceling each other out: macro liquidity is neither fully tightening nor completely easing, regulatory expectations fluctuate repeatedly, and mainstream assets are being tugged back and forth within a wide oscillation range, making it difficult to provide sufficiently certain mid-term bullish or bearish paths. For institutions using leverage and seeking high-risk-adjusted returns, recklessly increasing positions in such an environment means using large-scale funds to gamble on a directionally ambiguous scenario.

With this judgment, Hayes opted to keep Maelstrom in a "holding pattern," using "not trading" as a form of active position management, preferring to endure the opportunity cost of "missing out" rather than exposing himself to a high-noise, low-win-rate trend environment. The only exception was the long position in Hyperliquid(HYPE). From published reports, this accumulation scale was described as "slight," and within the entire fund portfolio, it resembled a directional chip and symbolic expression: under the premise of tightening overall risk budgets, Hayes remains willing to bet on certain platforms with structural narratives, but will strictly control weight, packaging it as a viewpoint on specific sectors rather than a comprehensive bet on the entire market trend. This "overall observation + local betting" combination effectively uses a minimal number of high-confidence positions to hedge against the psychological and performance pressure of being entirely uninvested.

Hotspots Dancing: Local Bulls in Meme and DeSci

In contrast to the institutions' calm, the Meme and DeSci sectors collectively warmed up in the first quarter. Against the backdrop of Bitcoin and mainstream assets fluctuating sideways, lacking clear breakthroughs, capital began to seek "local tracks" that could tell new stories and exhibit high volatility. Meme tokens and assets related to decentralized science started to strengthen from the earlier part of the quarter, among which BIO surged approximately 120% within a single quarter (according to a single source), becoming one of the most representative targets in the DeSci narrative. The doubling of BIO's price is not just a single-stock phenomenon; it is also a mirror of emotion: it reflects that when the main trend is absent, the market is willing to pay a premium for the new narrative of "science + crypto," and is also willing to accumulate short-term chips on highly uncertain early concepts.

Meanwhile, the appetite for high-risk assets is also concentrated in other sectors. The total market capitalization of pre-IPO stock tokens expanded by about five times in the first quarter, reaching approximately $17 million (according to a single source), indicating that secondary market players began to engage in "class one market" valuation recalibration opportunities through on-chain tokenization products; while in UEFA Champions League prediction contracts, the relevant market transaction volume reached approximately $240 million (according to a single source), sports events have been financialized into highly liquid short-term bets, becoming another channel for releasing risk appetite. Behind these seemingly scattered numbers is a singular emotional mainline: when the macro market cannot establish a trend, capital concentrates on any local story that can tell of "multiplying markets," and any asset that can rise fast enough and has enough volatility will be repeatedly brought to the stage.

Project Team Reduction Sparks a Stampede: BLESS's Moment of Trust

On the flip side of local revelry is the stampede risk that could be ignited at any time by actions from the project team. Within the first quarter, the project-related address of BLESS once transferred approximately 300 million BLESS tokens in one go, equivalent to about $3.83 million at the time (according to a single source), blockchain analysis attributed this large transfer to actions by the project team or a highly concentrated single-address behavior. For a token that heavily relies on narrative and community consensus, such a volume of chip movement was quickly interpreted as a signal of "team reduction," amplifying the market's sensitive instinct towards "offloading" and "cashing out." Selling pressure soon concentrated and exploded in the secondary market, and within a short period, BLESS's price experienced a flash crash of approximately 55%, with liquidity rapidly drained in a sell-off squeeze, and buy orders hanging on the order book could hardly absorb such a wave of chip dumping, leading the price to break through multiple supports.

This stampede is not just a price event; it is a lesson on "project team behavior — retail sentiment — market structure" regarding risk. The large transfer out of the project address might have various explanations such as operation, capital management, or even internal restructuring. However, in the blockchain world where information is extremely asymmetric, most small and medium investors neither see the true destination of funds nor can obtain immediate explanations from management, thus they can only make the most conservative choice amid panic and imagination — sell first and talk later. The sharp decline of BLESS clearly exposes an old problem: without transparent constraints, any action taken by the project team regarding chips is viewed by the market as a "trust vote"; once this trust vote is interpreted as "voting against," the stampede can quickly occur within milliseconds in the responsive trading system.

Institutions Watching, Retail Charging: Two Fates on the Same K-Line

If we pull the K-line of the first quarter of 2026 onto the same graph, we will see two completely different trajectories: one is the institutional funds like Maelstrom, which are almost "suspended", remaining still in the "No Trade Zone," with the exception of holding a few high-confidence positions; the other is retail investors and high-frequency players engaging in day and night short-term bets in Meme, DeSci, and prediction markets, using high-frequency trading and frequent position changes to fill the void left by the macro lack of a trend. The former is extremely restrained at the position level, while the latter has the position turnover rate floored. The fundamental difference lies in: institutions focus on macro and risk-reward ratio, while retail chases stories and multiples. During periods lacking a clear trend, macro signals and regulatory expectations struggle to support large-scale, long-cycle directional bets, so institutions are more inclined to defend their drawdown limits, waiting for a real "fat tail moment"; whereas for many retail investors, as long as they can see a potential expectation of "X2, X5" on a single token, even if the underlying fundamentals are murky and sustainability is questionable, it is enough to drive successive buying and bottom-fishing.

Therefore, "No Trade Zone" itself is a type of position: it does not mean doing nothing, but rather casting a vote against the current cost-effectiveness through being uninvested or at extremely low positions. In contrast, what is unfolding in the Meme and local concept sectors is more like a "local bull market may just be a retail party" real-world experiment — prices wildly fluctuate, and emotional peaks repeatedly dawn, but in the absence of macro tailwinds and limited marginal liquidity expansion, those able to exit gracefully are often just a few. Positioned at Hayes's side, he expresses a judgment through an almost "zombie-like" trading frequency: in a zone with unclear trends, frequent participation is more like emotion management rather than asset management.

AI Agents and Hormuz Narrative: Shadows of Distant Black Swans

In a few public statements, Hayes raised a rather controversial judgment: the future trajectory of the crypto market will largely depend on the degree of proliferation of AI agents and the evolution of the situation in the Strait of Hormuz. This assertion itself is still a hypothesis to be verified, and public information also lacks a complete path and timeline for how he derives this from specific mechanisms to the market. Nonetheless, these two variables still provide an observational framework: if the widespread application of AI agents may reshape trading structures, information efficiency, and even asset issuance and pricing mechanisms, then this represents a long-term driving force at the paradigm level of technology; while a critical geopolitical chokepoint like the Strait of Hormuz, once drastic fluctuations occur, could become a macro black swan impacting global risk assets through energy prices, inflation expectations, and risk-aversion sentiment.

From this angle, Hayes is actually looking toward both ends: on one side, whether technological narratives can truly land on productivity and financial infrastructure; on the other side, whether geopolitical shocks will reshape global liquidity and the pricing of safe-haven assets. However, it must be emphasized that public information currently does not provide his detailed argument, timing, or quantitative pathways for either, nor is there any reliable data pointing to a specific window of occurrence. Therefore, a more prudent attitude would be to regard these as high-uncertainty hypotheses rather than executable investment guidance. For ordinary investors, treating them as boundary conditions for establishing a macro scenario analysis is acceptable, but one should never bet all in based on the premise of "a certain black swan will definitely come."

A Multiple Choice Question in an Era Without Trends: Not Trading is Also Trading

Pulling the narrative line of the first quarter of 2026, we will find several seemingly contradictory yet simultaneously valid scenes: macro-level lacks a clear trend, mainstream assets oscillate repeatedly within a range; institutional funds represented by Maelstrom contract their lines, preferring to stay long-term in the "No Trade Zone"; while the repressed FOMO sentiment continuously seeks outlets through rotations of local sectors like Meme, DeSci, pre-IPO tokens, and prediction markets. The silence of large funds and the noise of small funds collectively shape the dominant tone of the market in the first quarter. In a sense, this is the first time the crypto market collectively makes a choice in the "no trend cycle": whether to become entangled in shorter lines or to take a step back and await truly significant opportunities.

In such an environment, Hayes's style of observation and retail's style of surfing the waves represent two vastly different risk-return curves and psychological structures. The former prioritizes controlling drawdowns, treating "missing out on a market" as an acceptable cost, countering uncertainty by lowering trading frequencies; the latter cares more about current return multiples and sense of participation, frequently jumping on board and betting on stories to hedge against the anxiety of "watching others make money." There is no absolute superiority between these paths, but the compatible capital scales, information acquisition abilities, and psychological resilience vary greatly. The real question is not whether one should FOMO, but whether a participant is aware of which side they stand on and whether they can bear the full consequences of that path.

Looking ahead to the upcoming cycle, the determinants of trends are unlikely to be a single sector narrative, but rather a combination of macro variables and liquidity — including the rhythm of global monetary policy, the speed of the formation of compliance and regulatory frameworks, and whether the technological infrastructure can support a new round of application expansion. Until these grand logics become truly clear, "not taking action is also a clear position choice," and recklessly treating a local bull market as the starting point for the next major cycle also comes with risks. For each participant, perhaps it is more critical to set a "threshold for stopping" like Hayes: allowing oneself to leave the table entirely when things are unclear; and allowing oneself to remain skeptical when the heat is at its peak. Those who can do this often retain enough chips and patience for when the real trend arrives.

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