From HYPE to ZEC: Unpacking the Four Main Themes of the Altcoin Rally

Original Author: David, TechFlow

The crypto market this week is clearly showing localized momentum.

Although BTC dominance is still hovering around 60% and the altcoin season index is only 35, far from the 75 threshold needed to confirm an altcoin season; if you're scrolling through English Crypto Twitter, you'll notice that capital is no longer waiting for macro signals.

Over the past week, at least four independent narratives have been running simultaneously:

1. Perpetual DEXs hitting new highs,

2. AI L1 rotation,

3. Privacy coin repricing,

4. Meme coins rekindling.

The seven coins frequently mentioned recently—HYPE, LIT, NEAR, GRASS, WLD, ZEC, and USELESS—are typical representatives, corresponding to four directions of market attention.

Let's first look at their performance trends:

Several insights can be gleaned from the table.

First, ZEC and HYPE have the strongest 30-day gains and trading volume, indicating the most solid capital confirmation in their respective narrative lines; LIT leads in 7-day gains, but its market cap is only 1/40th of HYPE's, offering high beta but also larger pullbacks;

USELESS has quietly risen nearly 70% over 30 days, but its market cap is only $75 million, completely incomparable to ZEC's tens of billions; WLD has barely moved, showing the weakest price confirmation in this group, yet it still generates significant discussion on English Crypto Twitter.

Below, we break down the logic behind each narrative.

1. Perp DEX Narrative: HYPE Hits New Highs, LIT Plays Catch-Up

Perp DEX is the narrative line with the most complete capital flow in this altcoin rally. For HYPE, three key factors—protocol revenue, institutional holdings, and ETF packaging—have materialized simultaneously within the same month.

HYPE's foundation is revenue. Hyperliquid accounts for approximately 70% of open interest in the perp DEX market, generating $14 million in weekly fee revenue, annualizing to over $600 million. 97% of protocol fees are automatically used to buy back HYPE.

This flywheel has been turning since the token launched in late 2024, and by May this year, millions of circulating tokens had been burned. Arthur Hayes's Maelstrom fund publicly stated it was selling holdings like ENA and PENDLE to increase its HYPE position, setting a $150 price target based on this revenue-buyback model.

Institutions are also following suit.

On-chain analyst @ai_9684xtpa tracked a wallet potentially linked to a16z, which has accumulated approximately 9.18 million HYPE (around $356 million) since mid-April (unconfirmed by a16z). On May 12 and 15, two HYPE spot ETFs from 21Shares and Bitwise were listed on Nasdaq and NYSE respectively, attracting over $5.6 million in net inflows in their first week.

BHYP's first-day trading volume set a record for altcoin ETF listings in 2026. Bitwise also allocates an additional 10% of its management fee for buybacks. On May 21, HYPE reached an all-time high of $62.14, entering the top ten by market cap.

Revenue = Foundation, Institutions = Amplifier, ETF = On-ramp. Having all three layers align simultaneously is indeed rare among altcoins.

The logic of sentiment spilling over to the same sector is straightforward. Lighter is the fourth-ranked player in the perp DEX space, with approximately 10% market share, but its market cap is only 1/40th of HYPE's. When HYPE hits an ATH and enters the top ten by market cap, traders naturally look for higher-beta plays along the same narrative.

On May 18, Vitalik mentioned in a public conversation that Lighter is a "relatively successful new project" within the Ethereum ecosystem, providing celebrity endorsement for this catch-up trade logic. LIT subsequently rose 30% in three days. Lighter also took its own actions by listing a SpaceX pre-IPO perpetual contract, integrating with the Tealstreet trading terminal, achieving an annualized revenue of approximately $26.3 million, and also having an auto-buyback mechanism.

However, LIT's risks are also more pronounced compared to HYPE.

A significant portion of Lighter's previous high trading volume stemmed from incentive programs and zero-fee design. Some market analysis suggests its volume-to-open-interest ratio is elevated, warranting observation for wash trading. LIT's circulating supply is only 25% of its total supply; team and investor tokens begin unlocking at the end of the year, with approximately 13.5 million tokens per month.

The flip side of high catch-up beta is that if the HYPE main narrative cools, LIT's pullback will be faster and deeper.

In my view, this main narrative is likely to continue attracting attention and capital in the short to medium term. Key points to watch include:

1. Whether HYPE's ETF inflows can reach the next level of magnitude;

2. Whether Hyperliquid's protocol revenue can open new growth avenues through synthetic traditional asset trading (e.g., crude oil, stock perps like SPCX)

If both materialize, the perp DEX narrative has more room to run; if ETF inflows stagnate and revenue growth slows, the pressure from long-short churn around HYPE's ATH will quickly transmit to LIT.

2. AI Narrative: NEAR Leads, GRASS and WLD Have Their Own Hurdles

The AI narrative isn't new in the crypto market, but this round shows a change in capital allocation.

NEAR is up 50% over 30 days, GRASS is up 8%, and WLD is up 5%. All three wear the AI hat, yet their price performance differs tenfold. The market is no longer buying everything indiscriminately; it's starting to differentiate between genuine innovation and catalyst-driven sentiment.

$NEAR: Privacy + AI Narrative

NEAR's price leadership is directly linked to its intensive product actions over the past two months.

On May 19, NEAR AI launched a framework-level privacy feature:

When users send prompts to external models like ChatGPT or Claude, the system automatically strips out passwords, API keys, and personal information. Developers can enable it by adding a single header line.

This creates a narrative around AI privacy identity, and it's relatively practical. Overseas tech narratives highly value privacy and rights, so this play touches both AI and satisfies the sentiment of privacy maximalists.

Furthermore, the timing coincides with momentum in the AI sector. OpenAI released its own Privacy Filter model in late April, and Microsoft launched PII Shield around the same time.

Essentially, NEAR is doing the same thing but on-chain, giving capital a reason to speculate.

Looking back further, the Near.com super app launched in February integrated wallets, cross-chain swaps, and confidential transactions. In March, they introduced Confidential Intents, a private execution layer. All these products converge on the same narrative:

Enabling AI agents to trade and coordinate on-chain while preserving privacy.

$GRASS: Working Product, But Held Back by Unlocks

GRASS's situation is different.

On the product side, it's one of the few projects in the DePIN sector with real paying customers, reportedly including a "seven-figure" AI lab (per Blockworks). Part of its revenue is used for GRASS buybacks.

On April 24, OKX listed the trading pair, improving liquidity access to some extent, leading to a 28% gain over 7 days.

In my view, the drag on price performance stems from supply-side unlocks. Season 2 airdrops are releasing approximately 170 million GRASS tokens, combined with team and investor unlocks, keeping short-term supply pressuring the price. Community discussions also focus on this point. GRASS's business is operational, but the token is currently in a state of supply-demand博弈, not yet a trending narrative.

$WLD: Identity + AI Narrative

WLD is the most easily misread token in this group.

Many categorize WLD as a "Sam Altman shadow trade" and move on, but in recent months, the foundation for its narrative has been changing:

The more AI proliferates, the more valuable it is to prove you are human. New variables supporting this logic have emerged intensively in recent months.

1. Eightco Holdings (ticker ORBS), a Nasdaq-listed company, holds 283 million WLD, representing 8.3% of the circulating supply, making it the largest publicly disclosed institutional holder globally.

2. Eightco also indirectly holds $90 million in OpenAI equity, with total assets of approximately $337 million, positioning itself as a bundled exposure to "AI + Identity + Creator Economy."

3. On May 1, World officially entered the US market, planning to deploy 7,500 Orb scanning devices within 12 months, several times the current global deployment.

The problem also lies on the supply side. WLD has a total supply of 10 billion, with roughly 3.4 billion currently in circulation. The team frequently deposits large amounts of tokens to Coinbase and Bybit. After July 24, the unlock rate will decrease by 43%, which could be a potential turning point, but until then, supply pressure remains high.

3. Privacy Narrative: English CT Re-FOMOs on Privacy Coins, ZEC Doubles in 30 Days

ZEC doesn't need much elaboration here; you can refer to our previous article: "Doubled in 30 Days, Up 15x This Year: Why is English Crypto Twitter FOMO-ing on $ZEC Again?"

Besides HYPE, English Crypto Twitter is filled with ZEC.

Naval Ravikant called ZEC "insurance against Bitcoin." Arthur Hayes shouted a long-term target of "10% of BTC's price" at Consensus. Multicoin Capital publicly disclosed a heavy position, reversing its 2019 stance that "privacy isn't worth paying for separately." Several hard catalysts are materializing simultaneously behind this wave of hype:

· The SEC confirmed it has closed its three-year investigation into the Zcash Foundation without recommending any enforcement action.

· Robinhood listed ZEC for nationwide trading on April 23, opening a retail on-ramp. Grayscale's ZEC Trust is applying to convert into a spot ETF (ticker ZCSH), which would be the first privacy coin ETF in the US if approved.

AI and privacy are virtually omnipresent narratives on English Crypto Twitter, with ZEC clearly acting as the bellwether.

4. Meme Narrative: USELESS Doesn't Need Fundamentals, But Needs Liquidity

USELESS has gained nearly 70% over 30 days, second only to ZEC.

During last summer's Solana launchpad wars (pump.fun, letsBONK, BelieveApp fighting for traffic), USELESS emerged as one of the few survivors from letsBONK. The name itself is the selling point: "I'm completely useless, and I don't pretend to be useful."

The logic behind this resurgence has nothing to do with fundamentals—meme coins never did. The key variable is CEX on-ramps: Coinbase, Bybit, and Crypto.com have all listed it for trading, with a 24-hour volume of approximately $25 million, providing enough liquidity for short-term trading. When meme capital rotates on Solana, an old meme with CEX access, community memory, and a self-propagating name can easily be pulled back into the spotlight.

However, the risks of meme coins need no elaboration; sentiment shifts faster than any other asset class, making them amplifiers of market emotion.

The all-time high of $0.43 is still far away. Be mindful of the token's supply structure and the significant prior pullback. Additionally, as a reminder, the name "USELESS" can be subject to ticker mapping issues across different aggregators. Always verify the contract address before trading.

In summary, these seven coins correspond to four narratives, with vastly different sources of attention and levels of confirmation.

· HYPE, NEAR, and ZEC are the most confirmed assets on their respective narrative lines, with verifiable catalysts and traceable capital flows.

· LIT and GRASS rely more on the continuation of the main narrative and the digestion of supply pressure; they offer high beta but lower certainty.

· WLD's demand narrative is upgrading, but token supply pressure hangs over it until July, requiring further direction. USELESS is pure attention and sentiment trading, not suitable for a fundamental analysis framework.

For spot investors, grasping the general脉络 of these narrative lines is essential. The current crypto market has a limited number of hot spots; prices may correct, but the main trend narratives are unlikely to change in the short to medium term.

For futures traders, timing is even more critical, requiring deeper analysis of shorter timeframes (e.g., 1-2 days) for changes in OI and funding rates.

Finally, structural opportunities remain in the market. Research conducted when no one is paying attention remains a good way to seek returns.

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