HYPE and ZEC Both Surge 20% in a Day: What’s Behind the Triple Catalysts?

Overview

In mid-to-late May 2026, two distinct sectors within the crypto market experienced a rare simultaneous surge: Hyperliquid’s native token, HYPE, rose approximately 20% within 24 hours, nearing its all-time high; Zcash (ZEC) recorded a similar single-day gain of about 18%, driving a collective rally across the entire privacy coin sector, including DASH, XMR, DCR, and ZEN.

Behind these two market movements lies not mere speculative trading, but the concentrated emergence of a series of substantial fundamental events: the accelerated progress of the SEC’s Innovation Exemption framework, the successive listing of institutional-grade ETF products, Coinbase taking over the Hyperliquid ecosystem’s USDC treasury, and Grayscale submitting the first-ever spot privacy coin ETF application. This article will detail each catalyst and provide exclusive analysis from the MEXC Crypto Pulse team.

Key Takeaways

Driven by four concurrent positive catalysts – the SEC Innovation Exemption policy expectation, the listing of Bitwise BHYP on the NYSE, Coinbase taking over the Hyperliquid USDC treasury, and the Pre-IPO contract narrative – HYPE saw a 24-hour gain of approximately 20%.

Propelled by three key drivers – the SEC closing its investigation, Grayscale filing the first US spot privacy coin S-1 application, and Multicoin Capital publicly disclosing its holdings – ZEC recorded a 24-hour gain of about 18%.

The resonance effect across the privacy coin sector is significant, with DASH, XMR, DCR, and ZEN all seeing collective uplifts driven by ZEC.

Both assets are near their historical highs, presenting extremely high short-term volatility. Careful position management is advised.

HYPE Market Analysis: Four Catalysts Ignite Simultaneously

SEC Innovation Exemption Framework: A Signal of Regulatory Shift

The macro backdrop for this HYPE rally is inseparable from policy changes at the U.S. Securities and Exchange Commission (SEC). According to a Bloomberg report, the SEC has prepared an "Innovation Exemption" framework, allowing blockchain platforms to issue tokenized products representing publicly traded company stocks without requiring explicit consent from the underlying company. The market interprets this framework as a significant regulatory easing for crypto innovation.

Hyperliquid, a decentralized perpetual exchange currently accounting for approximately 60% of on-chain derivatives trading volume, aligns closely with the tokenized stock narrative. Should the Innovation Exemption framework be implemented, Hyperliquid would be among the most direct beneficiaries, significantly strengthening the value re-evaluation logic for HYPE.

Furthermore, Hyperliquid’s annualized revenue run rate had reached approximately $843 million by March 2026. With 97% of platform fees used to buy back HYPE, this deflationary mechanism has led to continuous upward revisions of its valuation expectations.

Bitwise BHYP: The First Spot ETF with Staking Rewards

On May 15, 2026, Bitwise Asset Management officially launched BHYP on the New York Stock Exchange. It is one of the first HYPE spot ETPs in the U.S. market and the industry’s first HYPE ETF to utilize proprietary infrastructure for staking – Bitwise executes the staking operation directly through its Bitwise Onchain Solutions division, rather than delegating to a third-party validator node.

Regarding the management fee, BHYP’s standard rate is 0.34%, but it is waived for the first month and for the initial $500 million in assets under management. With approximately $11 billion in assets under management, this launch marks HYPE’s official entry into the list of institutionally allocable assets.

Prior to this, 21Shares had already debuted THYP on the Nasdaq on May 12, 2026. The successive entry of these two institutions further solidifies Hyperliquid’s position within the institutional crypto narrative.

Coinbase Takes Over Hyperliquid's USDC Treasury

Nearly concurrent with the BHYP listing, Coinbase issued an official announcement on May 14, 2026, formally becoming the official treasury deployer for USDC on the Hyperliquid platform. Under the AQAv2 (Aligned Quote Asset v2) framework, Coinbase replaced the previous Native Markets, taking over liquidity management responsibilities for USDC within the Hyperliquid ecosystem.

The financial significance of this agreement should not be underestimated: the total supply of USDC on the Hyperliquid platform has reached approximately $5.0 to $5.8 billion, an increase of about 2x year-over-year. Under the new framework, the majority of the yield on USDC reserves will flow back to the Hyperliquid protocol, directly benefiting HYPE holders. Previously, these yields were primarily allocated to Circle and Coinbase.

Meanwhile, the ecosystem stablecoin USDH, previously operating on Hyperliquid, will be gradually phased out. Users can exchange USDH for USDC or fiat currency with zero fees via the USDH Dashboard. Circle acts as the cross-chain infrastructure provider in this process, responsible for the technical asset transfer through its Cross-Chain Transfer Protocol (CCTP).

Pre-IPO Contract Narrative: The Imagination Space for On-Chain Capital Markets

Coupled with the policy expectations of the SEC Innovation Exemption framework, the market’s narrative regarding Hyperliquid as "on-chain capital market infrastructure" has also been gaining momentum. Bitwise’s Chief Investment Officer, Matt Hougan, publicly stated that HYPE is the best-performing large-cap crypto asset in 2026, with year-to-date gains exceeding 77%. However, he believes the market still underestimates its value – because the vast majority of investors view Hyperliquid solely as a perpetual exchange, overlooking that nearly half of its trading volume comes from non-crypto assets like stocks and prediction markets.

This framework aligns strongly with the "super app" vision advocated by SEC Chairman Paul Atkins – the ability to custody and trade multiple asset classes under a single license. The Hyperliquid Pre-IPO contract narrative has thus become a core theme for market repricing of HYPE’s valuation.

ZEC Market Analysis: Systematic Re-evaluation of the Privacy Sector

SEC Closes Investigation: End of Years-Long Regulatory Shadow

There is a key, unavoidable milestone for ZEC’s powerful rally in this cycle: On January 15, 2026, the SEC formally closed its investigation, announcing it would take no enforcement action against the Zcash Foundation, concluding an inquiry lasting nearly two years. The investigation had initially been opened in August 2023, concerning matters related to certain digital asset offerings.

The SEC’s withdrawal not only removed the sword of regulatory uncertainty hanging over ZEC but also sent a broader signal to the market: privacy protection mechanisms based on zero-knowledge proof technology have formally entered a zone of regulatory tolerance. Alex Bornstein, Executive Director of the Zcash Foundation, described Q1 2026 as "one of the most defining periods" in the foundation’s history.

Grayscale Files First-Ever Privacy Coin Spot ETF

On May 8, 2026, Grayscale Investments filed a Form S-3 application with the SEC to convert its Zcash Trust into a spot ETF, intending to list it on the NYSE Arca under the ticker ZCSH. The underlying asset would be physical ZEC, with its benchmark being the CoinDesk Zcash Price Index minus fees.

This represents the first-ever spot privacy coin ETF application in the global crypto market. Coinbase Custody is the appointed custodian, and Coinbase Inc. serves as the prime broker. As of the end of March 2026, the trust held approximately 391,103.89 ZEC, with a fair market value of around $99.4 million.

Analysts estimate that, if approved, the ETF could drive potential capital inflows of $500 million to $2 billion. Given ZEC’s relatively small circulating supply and shallow market depth, the price impact of such inflows could be significantly more pronounced than for mainstream coins.

Multicoin Capital Publicly Discloses Holdings: Anchoring Institutional Confidence

Multicoin Capital co-founder Tushar Jain publicly stated on X (formerly Twitter) on May 6, 2026, that the fund had been consistently buying ZEC since February 2026 and had established a substantial position. Jain characterized this bet as a "return of cypherpunk ethos," with his investment logic directly pointing to macro political risk: Bitcoin’s transparent balance still faces the potential for state-level asset seizure, while ZEC, with its privacy features, is positioned as a hedging tool against "confiscatable assets."

This disclosure triggered a strong reaction in the market: ZEC surged approximately 30% in 24 hours, breaking through $550 and extending beyond $585, setting a new high for 2026. This also triggered approximately $62 million in short liquidations, making it the second-largest liquidation event that week after Bitcoin.

Privacy Sector Resonance: DASH, XMR, DCR, ZEN All Follow the Uptrend

ZEC’s strong performance quickly spread across the entire privacy coin sector. Monero (XMR) hit a new all-time high during the same period, surpassing its 2021 peak. Its FCMP++ (Full-Chain Membership Proofs) protocol upgrade introduced zero-knowledge proofs based on full chain history, widely regarded by developers and analysts as the most important privacy advancement since RingCT. DASH, DCR, and ZEN also showed clear correlated upward movements, with the overall privacy sector exhibiting a pattern of systematic revaluation.

Market consensus is gradually shifting from "privacy coins are regulatory targets" to "privacy infrastructure has independent investment value." This narrative shift is the natural result of market pricing following the convergence of multiple catalysts.

Exclusive Insights from the MEXC Crypto Pulse Team

HYPE's core logic is sector pricing, not short-term speculation. Hyperliquid has simultaneously gained SEC policy dividends, institutional ETF endorsements, and Coinbase ecosystem access. The combination of these three factors creates not just simple news-driven momentum, but a stage-by-stage confirmation of its positioning as "on-chain capital market infrastructure." Our team notes that while HYPE is up over 77% year-to-date, Bitwise still publicly states it is undervalued. This institutional stance of "a strong asset that is still undervalued" deserves attention – it typically suggests institutions are still in an accumulation phase rather than a distribution phase. Whether Hyperliquid can truly capture the tokenized stock trading flow anticipated from the SEC Innovation Exemption framework will be the core variable for its next pricing phase. It is important to note that HYPE is currently still unavailable to US users, and the pace of its compliance process may diverge from market expectations.

ZEC's rebound marks the beginning of privacy sector repricing, but its sustainability needs observation. Multicoin Capital's institutional backing, combined with the Grayscale ETF application, has re-anchored ZEC's narrative from a "regulatory-targeted fringe asset" to a "macro hedging tool." This represents a leap in narrative hierarchy, not merely a technical bounce. However, our team also notes that ZEC has a small circulating supply and shallow market depth, making short-term volatility easily amplified. The current price level already incorporates significant optimistic expectations. Furthermore, the EU’s Anti-Money Laundering Regulation (AMLR), effective July 2027, will require regulated crypto service providers to delist privacy coins, posing a substantial medium-term regulatory risk exposure. Investors participating in ZEC and the privacy sector must maintain clear judgment between narrative realization and compliance pressures.

FAQ (Frequently Asked Questions)

Q1: What is the HYPE token?

HYPE is the native token of the Hyperliquid blockchain. Hyperliquid is a high-performance Layer 1 blockchain, with its core product being a decentralized perpetual exchange. The platform processed a total trading volume of $2.9 trillion in 2025, an increase of over 400% year-over-year. HYPE's economic model is designed such that 97% of platform fees are used for buybacks and burns, creating a direct deflationary mechanism.

Q2: What is the difference between the Bitwise BHYP ETF and directly holding HYPE?

BHYP trades on the New York Stock Exchange as a traditional stock, meaning investors do not need to self-custody the token. It is suitable for investors seeking exposure to HYPE through a securities account. However, BHYP holders cannot directly use Hyperliquid's on-chain functions, and the ETF's share price may deviate from its net asset value. Directly holding HYPE allows participation in on-chain staking and ecosystem interaction but requires self-management of private keys and custody risks.

Q3: What are the main differences between ZEC and other privacy coins like XMR?

Zcash (ZEC) uses optional privacy mechanisms, allowing users to choose whether to use shielded addresses for private transactions. Currently, the shielded supply represents about 30% of the total circulating supply. Monero (XMR), on the other hand, employs mandatory, full-scale privacy mechanisms where all transactions are untraceable by default. From a compliance perspective, this makes it harder to integrate with regulatory frameworks, but it also possesses a purer form of censorship resistance.

Q4: What does the SEC closing its investigation into Zcash mean?

The SEC formally notified the Zcash Foundation in January 2026 that it would take no enforcement action against it, meaning the investigation concluded without any penalties, injunctions, or findings. This outcome removed the regulatory risk that had been hanging over ZEC for years. It is interpreted by the market as: privacy technology based on zero-knowledge proofs has formally entered a zone of regulatory tolerance, laying the groundwork for the progression of Grayscale's ETF application.

Q5: What is AQAv2, and why is Coinbase taking over the Hyperliquid USDC treasury important?

AQA (Aligned Quote Asset) is the quote asset framework used for unified settlement within the Hyperliquid ecosystem. Version v2 establishes USDC as the sole AQA and replaces the treasury deployer with Coinbase. The financial significance of this change is that the interest income generated from the approximately $5.0 to $5.8 billion in USDC reserves on the Hyperliquid platform will primarily flow back to the protocol itself, rather than to Circle or Coinbase. This directly strengthens the long-term value proposition for HYPE holders.

Q6: Where can I trade HYPE and ZEC?

You can trade HYPE and ZEC on MEXC. MEXC offers one of the largest selections of trading pairs globally and supports various fiat currency on-ramps.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer. The cryptocurrency market is highly volatile, with prices capable of significant fluctuations in short periods, and investors may lose their entire principal. Price data, project information, and market forecasts mentioned herein reflect market conditions only at the time of writing and do not represent any guarantee of future performance. Before making any investment decisions, please fully assess your own risk tolerance and consult with a professional financial advisor.

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