HYPE and ZEC both surged 20% on the same day. What happened behind the triple catalysts?

Overview

In mid-to-late May 2026, two distinct sectors of the crypto market experienced a rare simultaneous surge: Hyperliquid's native token, HYPE, rose approximately 20% in 24 hours, approaching 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 price movements lies not mere speculative trading, but a series of substantive fundamental developments occurring in rapid succession: the acceleration of the SEC's Innovation Exemption framework, the launch of institutional-grade ETF products, Coinbase taking over the Hyperliquid ecosystem's USDC treasury, and Grayscale submitting the first-ever spot ETF application for a privacy coin. This article will break down each catalyst and provide exclusive analysis from the MEXC Crypto Pulse team.

Key Takeaways

HYPE surged approximately 20% in 24 hours, driven by four converging catalysts: expectations around the SEC's Innovation Exemption policy, the listing of Bitwise BHYP on the NYSE, Coinbase taking over the Hyperliquid USDC treasury, and the Pre-IPO contracts narrative.

ZEC rallied approximately 18% in 24 hours, propelled by three drivers: the SEC closing its investigation, Grayscale filing the nation's first spot privacy coin ETF S-1 application, and Multicoin Capital publicly disclosing its holdings.

The privacy coin sector showed a significant resonance effect, with DASH, XMR, DCR, and ZEN all rallying in tandem with ZEC.

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

HYPE Price Analysis: Four Catalysts Ignite Simultaneously

The SEC Innovation Exemption Framework: A Signal of Regulatory Shift

The macro backdrop for this HYPE rally is inseparable from the policy shift at the U.S. Securities and Exchange Commission (SEC). According to Bloomberg, 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 companies. The market interprets this framework as a significant relaxation of regulatory constraints on crypto innovation.

Hyperliquid, currently accounting for approximately 60% of on-chain derivatives trading volume via its decentralized perpetual exchange, is highly aligned with the tokenized stock narrative. Should the Innovation Exemption framework be implemented, Hyperliquid stands to be one of the most direct beneficiaries, significantly strengthening the logic for a revaluation of HYPE.

Concurrently, Hyperliquid's annualized revenue run rate had already reached $843 million by March 2026. With 97% of platform fees used to buy back HYPE, this deflationary mechanism continuously fuels upward revisions in market 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 first HYPE ETF to utilize proprietary infrastructure for staking—Bitwise executes staking operations directly through its Bitwise Onchain Solutions division, rather than delegating to third-party validator nodes.

Regarding management fees, BHYP has a standard fee of 0.34%, but fees are temporarily waived for the first month and for the initial $500 million in assets under management. With Bitwise managing approximately $11 billion in assets, this launch marks HYPE's formal entry into the list of institutionally allocatable assets.

Prior to this, 21Shares had already pioneered the market by launching THYP on the Nasdaq on May 12, 2026. The successive entries of these two institutions further solidify Hyperliquid's position in the institutional crypto narrative.

Coinbase Takes Over Hyperliquid USDC Treasury

Nearly concurrent with the BHYP launch, Coinbase published 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, assuming liquidity management responsibilities for USDC within the Hyperliquid ecosystem.

The financial implications of this agreement are significant: The total USDC supply on the Hyperliquid platform has reached approximately $5.0 to $5.8 billion, roughly doubling year-over-year. Under the new framework, the majority of USDC reserve yields will accrue to the Hyperliquid protocol, flowing directly to HYPE holders, whereas previously these yields were primarily captured by Circle and Coinbase.

Simultaneously, 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 via its Cross-Chain Transfer Protocol (CCTP).

The Pre-IPO Contract Narrative: Unlocking the Potential of On-Chain Capital Markets

Compounding the policy expectations from the SEC Innovation Exemption framework, the market narrative of Hyperliquid as "on-chain capital market infrastructure" continued to gain traction during this period. Bitwise's Chief Investment Officer, Matt Hougan, publicly stated that HYPE is the best-performing large-cap crypto asset of 2026, with year-to-date gains exceeding 77%. However, he believes the market still underestimates its value—because most investors view Hyperliquid merely as a perpetual exchange, overlooking that nearly half of its trading volume comes from non-crypto assets like equities and prediction markets.

This framework aligns perfectly with the vision of a "super app" championed by SEC Chairman Paul Atkins—a single licensed platform enabling the custody and trading of multiple asset classes. The Hyperliquid Pre-IPO contract narrative has thus become a core element driving the market's revaluation of HYPE.

ZEC Price Analysis: A Systematic Revaluation of the Privacy Sector

SEC Closes Investigation: End of a Multi-Year Regulatory Shadow

A pivotal and unavoidable catalyst for ZEC's recent surge occurred on January 15, 2026, when the SEC formally closed its investigation into the Zcash Foundation, announcing it would not take any enforcement action, thereby ending a nearly two-year probe. The investigation, initially launched in August 2023, concerned matters related to the issuance of certain crypto assets.

The SEC's withdrawal not only removed the Sword of Damocles hanging over ZEC's regulatory status but also sent a broader signal to the market: privacy protection mechanisms based on zero-knowledge proofs have officially 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, intended to trade on NYSE Arca under the ticker ZCSH. The underlying asset would be physical ZEC, benchmarked against the CoinDesk Zcash Price Index minus fees.

This represents the first-ever spot ETF application for a privacy coin in the global crypto market. Coinbase Custody would serve as the custodian, with Coinbase Inc. acting 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 approval of the ETF could trigger 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 capital inflows could be significantly more pronounced than for mainstream cryptocurrencies.

Multicoin Capital Publicly Discloses Holdings: Anchoring Institutional Confidence

On May 6, 2026, Multicoin Capital co-founder Tushar Jain publicly announced on X that the fund had been consistently buying ZEC since February 2026 and had established a significant position. Jain characterized this bet as a "return of cypherpunk ethos," with an investment thesis directly linked to macro political risk: Bitcoin's transparent balances could still face state-level asset seizure, while ZEC, with its privacy features, is positioned as a hedge against "confiscatable assets."

This disclosure triggered a strong reaction in the market: ZEC surged approximately 30% within 24 hours, breaking through $550 and extending above $585 to hit a new high for 2026. This move also triggered approximately $62 million in short positions forced to liquidate, making it the largest liquidation event that week after Bitcoin.

Privacy Sector Resonance: DASH, XMR, DCR, ZEN Follow Suit

ZEC's strong performance rapidly spread across the entire privacy sector. Monero (XMR) hit an 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 considered by developers and analysts as the most significant privacy advancement since RingCT. DASH, DCR, and ZEN also showed clear correlated increases, presenting a picture of systematic revaluation across the privacy sector.

Exclusive Insights from the MEXC Crypto Pulse Team

The core logic for HYPE is sector pricing, not short-term speculation. Hyperliquid simultaneously benefits from SEC policy tailwinds, institutional ETF endorsements, and Coinbase ecosystem integration. The combination creates not just simple news-driven momentum but a phased confirmation of its positioning as "on-chain capital market infrastructure." Our team notes that while HYPE's year-to-date gains exceed 77%, Bitwise still publicly states it is undervalued. This institutional stance – calling a strong asset "undervalued" – is noteworthy and typically suggests institutions are still in an accumulation phase rather than a distribution phase. Whether Hyperliquid can successfully capture the tokenized stock trading volume facilitated by the SEC's Innovation Exemption framework will be the core variable for its next stage of pricing. A key risk to monitor is that HYPE is currently still unavailable to U.S. users; the pace of compliance development may diverge from market expectations.

ZEC's rally marks the beginning of a privacy sector repricing, but its sustainability remains to be seen. Multicoin Capital's institutional endorsement, combined with the Grayscale ETF application, has re-anchored ZEC's narrative from a "marginalized asset under regulatory pressure" 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, which can easily amplify short-term volatility. Current price levels already embed 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, creating a substantial medium-term regulatory risk exposure. Investors participating in ZEC and the privacy sector must maintain clear judgment between narrative fulfillment 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 public chain, with its core product being a decentralized perpetual exchange. The platform processed $2.9 trillion in trading volume throughout 2025, marking an increase of over 400% from the previous year. The economic model for the HYPE token is designed so that 97% of platform fees are used to buy back and burn HYPE, 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, allowing investors to gain HYPE exposure through a securities account without needing to self-custody the token. This suits investors wanting HYPE exposure via standard brokerage accounts. However, BHYP holders cannot directly use Hyperliquid's on-chain functionalities, and the ETF share price may deviate from its net asset value. Directly holding HYPE allows participation in on-chain staking and ecosystem interactions but requires managing private keys and associated custody risks personally.

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

Zcash (ZEC) employs optional privacy, 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), conversely, uses mandatory full-time privacy, making all transactions untraceable by default. This makes it harder to reconcile with regulatory frameworks from a compliance perspective, but it also provides 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 not take any enforcement action, meaning the investigation concluded without any penalties, injunctions, or findings. This outcome removed the regulatory risk that had hung over ZEC for years and was interpreted by the market as a signal that zero-knowledge proof-based privacy technology has officially entered a zone of regulatory tolerance, paving the way for the progression of the Grayscale ETF application.

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

AQA (Aligned Quote Asset) is the framework for the quote asset used for unified settlement within the Hyperliquid ecosystem. The v2 iteration establishes USDC as the sole AQA and changes the treasury deployer to Coinbase. The financial significance of this change lies in the fact that the interest generated from the approximately $5.0 to $5.8 billion USDC reserves on the Hyperliquid platform will now 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 both HYPE and ZEC on MEXC. MEXC offers one of the widest selections of trading pairs globally and supports multiple fiat currency on-ramp methods.

Disclaimer

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

About the Author

This article was written by the MEXC Crypto Pulse Research Team. The team specializes in in-depth analysis of the cryptocurrency market, covering