HYPE Brothers Wax, ETH Brothers Wane

Key Takeaways.

• Bitcoin lost $80K as ETF demand cooled; Glassnode sees resistance, with October bottom eyed.
• Ethereum saw 8 EF exits and 31% staking; Bankless turmoil may spur a new ETH org.
• Hyperliquid’s HYPE rose 50% on $11M fees; CME pressure and ETF flows are next tests.

Bitcoin spent the week grinding downward after losing the $80,000 level, finishing Friday just below $77,000. Ethereum and altcoins went sideways, with a few select outliers printing green candles.

The very concentrated stock indices pushed higher once again, while precious metals continued consolidating. Meanwhile, bond markets in both the U.S. and Japan showed more signs of weakness as yields climbed even higher.

Bitcoin is currently battling heavy overhead technical and institutional resistance. Glassnode corroborated this cautious outlook, noting that weakening spot demand, slowing ETF inflows, and overcrowded long positions are actively cooling upside momentum.

The exhaustion is showing at the institutional level. The latest 13F filings revealed that Harvard University slashed its spot Bitcoin ETF exposure by nearly 50% and completely liquidated its ethereum positions in Q1. Meanwhile, billionaire Mark Cuban made waves by announcing he sold most of his bitcoin.

However, zoom out and the long-term cyclic pattern remains intact. One analyst highlighted a metronomic historical pattern governing Bitcoin’s macro movements: each bull run lasts exactly 1,065 days, followed by a precise 365-day bear market. If this holds true, our current correction is slated to find its bottom in October.

As the title of this week’s newsletter implies, two stories defined the week. Both have been ongoing developments over the past couple of months, although the Ethereum story is arguably years in the making.

For years, Ethereum-aligned folks looked with envy at how the Solana Foundation and Solana leadership scaled the L1 and made concerted efforts to cultivate companies on Solana. To the relief of many, in early 2025, the Ethereum Foundation (EF) and leadership (Vitalik et al.) began to take scaling and business cultivation seriously.

While scaling the L1 is still very much a goal, in March, the EF released the CROPS mandate which essentially frames the EF as a steward concerned with cypherpunk values, not a promoter concerned with market share.

Critics like this Bankless piece read it as “an out-of-touch return to vibes over pragmatic vision” and Ryan Sean Adams’ response was essentially “fine, but then we need a different org to care about ETH as an asset.” Haseeb Qureshi and David Hoffman commiserated about CROPS in a Chopping Block podcast several months ago.

Eight senior researchers at the EF have quit in 2026, five of them in May alone. This week, Bankless, the undisputed flag-bearer of Ethereum, announced a major reorganization. Ryan Sean Adams, one half of the Bankless duo, announced he is taking a backseat role, passing full control to his ETH brother David Hoffman.

Meanwhile, Mr. Hoffman admitted to selling the last of his ETH, citing a massive shift in conviction. Hoffman clarified that while he still backs the network, “ ETH the asset is increasingly questionable,” shifting his attention to alternative assets like NEAR, ZEC, HYPE, and VVV. Amidst these leadership changes, Bankless also quietly laid off a majority of its team.

Crypto Twitter was abuzz about Ethereum’s future. Critics like Austin Campbell quipped that “Ethereum will be remembered as the MySpace of crypto.” Mr. Campbell’s sparring partner Omid Malekan disagreed. Haseeb Qureshi’s post was a bit of a Rorschach test: “Ethereum is the Microsoft of crypto.” Unchained’s Laura Shin had a somewhat negative post reflecting on the past couple of months of the EF. Others dismissed concerns that ETH is over, or that ETH has died (which has been declared 172 times).

Some even think all this ETH hate or despair is bullish.

Dankrad Feist argued that the community urgently needs a new, economically aligned organization to drive asset value. Bankless’ Mr. Adams agreed. Fundstrat’s Tom Lee posted that he’s basically ready to take the baton.

On the market front, ETH faces immediate tactical pain. Tom Lee pointed out that ETH’s underperformance is heavily tied to its historically high inverse correlation with spiking oil prices, as US crude inventories experience historic drawdowns. Yet under the surface, long-term conviction remains quietly sticky: the ETH staking ratio climbed to 31% this week, even as the asset sits down 26% year-to-date.

Ethereum’s dumpster price action and sentiment is matched on the other side by Hyperliquid exuberance. The past several months have been positive news story after positive. This week more positive news helped propel HYPE up roughly 50%.

U.S.-listed Hyperliquid ETF inflows have outpaced Bitcoin ETFs during the debut trading week, spurring Eric Balchunas to gush about the “The HYPE brothers $THYP & $BHYP.” Bitwise CEO Hunter Horsley is right, that has a nice ring to it.

Bitwise CIO Matt Hougan threw weight behind Hyperliquid, asserting that it isn’t just a crypto application, but a “super app” targeting the $600 trillion global asset market. The numbers back up the assertion: Hyperliquid captured 43% of all on-chain fee revenue across crypto this week, pulling in roughly $11M. However, Mr. Qureshi warned Hyperliquid has “poked the hornet’s nest”, drawing direct eyes and competitive pressure from legacy financial behemoths like the CME.

Solana has struggled for attention with the spotlight on Hyperliquid. Solana’s newest darling perp dex (after Drift’s $285 million hack) Phoenix is being shilled hard by Solana royalty. Jump Crypto’s highly anticipated Firedancer validator client is finally live on mainnet. Pump.fun introduced USDC liquidity pool trading pairs, a move designed to bring price stability and higher ceilings to memecoins, though some wonder if this is bearish for SOL.

Some traders noted that it may be time to pivot to the Base trenches as ecosystem activity surges. Meanwhile, a fierce value-accrual debate erupted when Raoul Pal praised Sui for making stablecoin transfers completely free. Commenters immediately fired back, noting that eliminating transaction fees destroys native token utility, leaving SUI holders with zero real economic value accrual.

Crypto x AI continues to be a prominent narrative. Not always for the benefit of crypto. Renowned macro researcher Leopold Aschenbrenner’s latest 13F filing revealed massive new allocations into Bitcoin miners aggressively pivoting to AI data centers, including Applied Digital, Bitfarms, CleanSpark, IREN, and Riot. Environmental pushback on data centers is also being met with aggressive counter-narratives:

As AI models hit benchmarks demonstrating they are smarter than nearly the entire human population, market participants like Algod are leaning into an AI-evangelist thesis, predicting imminent breakthroughs at the Bittensor (TAO) subnet level.

While strong corporate earnings suggest that any near-term S&P 500 drawdowns will be minimal, the hope for cheaper capital is dissolving. Analysts like TXMC note that the thesis for imminent rate cuts relies on AI instantly delivering massive, deflationary economic growth; an unlikely, tectonic ask.

Finally, physical security concerns are escalating. Following a staggering 75% year-over-year surge in targeted attacks against digital asset holders, companies are dramatically beefing up security. Case in point: Coinbase is now spending $8.6 million annually on personal security for CEO Brian Armstrong. A move that looks entirely justified given the terrifying news out of France this week, where the wife of The Sandbox co-founder Sebastien Borget narrowly escaped a sophisticated, masked home kidnapping attempt.

This is your semi-regular reminder to stay safe out there.

-David Sencil