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

Overview

In mid-to-late May 2026, the crypto market witnessed a rare resonance across two distinct tracks: Hyperliquid’s native token HYPE surged approximately 20% in 24 hours, nearing its all-time high; Zcash (ZEC) simultaneously recorded an 18% single-day gain, 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 hype, but a series of substantive fundamental events occurring in rapid succession: the accelerated progress of the SEC's Innovation Exemption framework, the listing 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 dissect each catalyst and provide exclusive insights from the MEXC Crypto Pulse team.

Key Takeaways

Driven by the quadruple catalysts of the SEC Innovation Exemption policy expectations, the Bitwise BHYP listing on the NYSE, Coinbase taking over the Hyperliquid USDC treasury, and the Pre-IPO contract narrative, HYPE saw an approximately 20% gain in 24 hours.

Propelled by the triple drivers of the SEC closing its investigation, Grayscale filing the first US spot privacy coin ETF S-1 application, and Multicoin Capital publicly disclosing its holdings, ZEC gained approximately 18% in 24 hours.

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 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 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 shares of publicly listed companies without requiring explicit consent from the underlying company. The market interprets this framework as a significant easing of regulatory constraints on crypto innovation.

Hyperliquid is currently the leading decentralized perpetual contract platform, accounting for approximately 60% of on-chain derivatives trading volume. Its ecosystem is highly aligned with the tokenized stock narrative. If the Innovation Exemption framework is implemented, Hyperliquid would be one of the most direct beneficiaries, significantly strengthening the logic for a revaluation of HYPE.

Furthermore, Hyperliquid’s annualized revenue run rate reached approximately $843 million by March 2026. The platform uses 97% of its fees to buy back HYPE. This deflationary mechanism has led to continuous 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. This is one of the first HYPE spot ETPs in the US 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 validators.

Regarding management fees, the standard fee for BHYP is 0.34%, but it is temporarily set at zero for the first month and for the initial $500 million in assets under management. Bitwise manages approximately $11 billion in assets. This listing marks HYPE's official entry into the list of assets allocable by institutions.

Prior to this, 21Shares had already launched THYP on the Nasdaq on May 12, 2026. The successive entries of these two institutions have further solidified Hyperliquid's position within the institutional crypto narrative.

Coinbase Takes Over Hyperliquid USDC Treasury

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

The financial significance of this agreement cannot be overlooked: the total USDC supply on the Hyperliquid platform has reached approximately $5 to $5.8 billion, representing a roughly 2x increase year-over-year. Under the new framework, the vast majority of interest earned on USDC reserves will flow back to the Hyperliquid protocol, directly benefiting HYPE holders. Previously, these earnings primarily accrued to Circle and Coinbase.

Meanwhile, the ecosystem stablecoin USDH, previously operating on Hyperliquid, will be gradually phased out of circulation. 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, utilizing its Cross-Chain Transfer Protocol (CCTP) to facilitate the technical transfer of assets.

Pre-IPO Contract Narrative: The Imagination of an On-Chain Capital Market

Combined with the policy expectations of the SEC Innovation Exemption framework, the market narrative positioning Hyperliquid as "on-chain capital market infrastructure" continued to gain momentum during this period. Bitwise 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%, but the market still underestimates its value—because the vast majority of investors only view Hyperliquid as a perpetual contract exchange, ignoring that nearly half of its trading volume comes from non-crypto assets like stocks and prediction markets.

This framework highly aligns with the "super app" vision advocated by SEC Chairman Paul Atkins—whereby a single license allows for the custody and trading of multiple asset classes. The Hyperliquid Pre-IPO contract narrative has thus become a core component of the market's valuation restructuring for HYPE.

ZEC Market Analysis: A Systemic Revaluation of the Privacy Sector

SEC Closes Investigation: End of Years-Long Regulatory Shadow

A crucial turning point for ZEC's major rally was on January 15, 2026, when the SEC officially closed its investigation into the Zcash Foundation, announcing no enforcement action would be taken, thus ending a nearly two-year probe. The investigation, initially started in August 2023, concerned matters related to certain crypto asset offerings.

The SEC's withdrawal not only removed the sword of regulatory risk hanging over ZEC but also sent a broader signal to the market: privacy protection mechanisms based on zero-knowledge proof technology have officially entered the zone of regulatory tolerance. Alex Bornstein, Executive Director of the Zcash Foundation, described the first quarter of 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 with the SEC to convert its Zcash Trust into a spot ETF, intending to list it 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 privacy coin ETF application in the global crypto market. Coinbase Custody will serve as the custodian, and Coinbase Inc. will act 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 ETF approval could bring in potential capital inflows of $500 million to $2 billion. Given ZEC's relatively small circulating supply and shallow market depth, the price impact from such inflows could be significantly more pronounced than for mainstream coins.

Multicoin Capital Discloses Holdings: Anchoring Institutional Confidence

Multicoin Capital co-founder Tushar Jain publicly stated on the X platform on May 6, 2026, that the fund has been continuously buying ZEC since February 2026 and has built a significant position. Jain characterized this bet as a "return of cypherpunk spirit," with an investment thesis directly targeting 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 tool for "confiscation-resistant assets."

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

Privacy Sector Resonance: DASH, XMR, DCR, ZEN Rally in Tandem

ZEC's strong performance quickly 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 upward movements, with the overall privacy sector presenting a pattern of systemic 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 market pricing outcome resulting from the superposition of multiple catalysts.

Exclusive Insights from the MEXC Crypto Pulse Team

The core logic for HYPE is sector pricing, not short-term speculation. Hyperliquid has simultaneously gained SEC policy dividends, 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 HYPE's year-to-date gains have exceeded 77%, yet Bitwise still publicly states it is undervalued. This institutional stance—calling a strongly performing asset "undervalued"—is noteworthy and typically implies institutions are still in an accumulation phase rather than a distribution phase. Whether Hyperliquid can successfully capture the tokenized stock trading flow enabled by the SEC Innovation Exemption framework will be the key variable for its next-stage pricing. A factor to watch carefully is that HYPE is currently not open to US users, meaning the pace of its compliance process may not align with market expectations.

ZEC's rebound marks the beginning of a privacy sector repricing, but its sustainability needs observation. The institutional endorsement from Multicoin Capital, coupled with the Grayscale ETF application, has re-anchored ZEC's narrative from a "marginalized, regulatorily suppressed asset" to a "macro-hedging tool." This represents a leap in narrative tier, 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. Current price levels already incorporate significant optimistic expectations. Furthermore, the EU's Anti-Money Laundering Regulation (AMLR) will come into effect in July 2027, requiring regulated crypto service providers to delist privacy coins. This constitutes a material medium-term regulatory risk exposure. Investors participating in ZEC and other privacy sectors must maintain a clear judgment between narrative realization and compliance pressure.

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 contract exchange. The platform processed $2.9 trillion in total trading volume in 2025, a year-over-year increase of over 400%. The economic model for the HYPE token is designed such 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 as a traditional stock on the New York Stock Exchange. Investors do not need to self-custody the token, making it suitable for those seeking HYPE exposure through a securities account. However, BHYP holders cannot directly use Hyperliquid's on-chain features, 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 self-management of private keys and custody risks.

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

Zcash (ZEC) employs an optional privacy mechanism, allowing users to choose whether to use Shielded Addresses for private transactions. Currently, approximately 30% of the circulating supply is in shielded form. Monero (XMR), on the other hand, uses mandatory total privacy; all transactions are untraceable by default. From a compliance perspective, this makes it harder to integrate with regulatory frameworks, 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 against it. This means the investigation concluded without any penalties, injunctions, or findings of wrongdoing. This outcome removed the multi-year regulatory risk hanging over ZEC and was interpreted by the market as a signal that privacy technology based on zero-knowledge proofs has officially entered a zone of regulatory tolerance, laying the groundwork 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 version establishes USDC as the sole AQA and changes the treasury deployer to Coinbase. The financial significance of this change is that the interest income generated from the approximately $5 to $5.8 billion in 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 HYPE and ZEC on MEXC. MEXC offers one of the highest numbers of trading pairs globally and supports various fiat currency deposit 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 significantly in a short period, and investors may lose their entire principal. The price data, project information, and market forecasts mentioned in this article 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.

About the Author

This article was written by the MEXC Crypto Pulse Research Team. The team specializes in in