Bankless co-founder David Hoffman says he moved out of Ether in June and into a group of smaller crypto assets led by Zcash and NEAR, arguing that the two tokens offer exposure to different pools of demand than Ethereum’s established market. In a recent write-up, Hoffman said several of those positions outperformed ETH in the months after his reallocation, framing the trade as a response to the increasingly difficult task of finding 10x returns in the largest cryptocurrencies.
Hoffman’s case rests on a division between crypto’s value-storage market, dominated by Bitcoin, and the smart-contract economy associated with Ethereum and its competitors. Zcash, or ZEC, is his preferred vehicle for the former category, while NEAR represents a bet on demand moving among networks designed for applications and on-chain services.
The argument challenges the conventional approach of concentrating allocations in Bitcoin and Ether. Those two assets remain the largest and most liquid parts of the market, but their scale means a comparable percentage move requires substantially more capital than it did in earlier cycles. Hoffman wrote that he does not see an obvious route for either Bitcoin or Ether to increase tenfold from current levels, while newer products and protocols may capture a larger share of incremental activity.
zcash and the bitcoin-adjacent trade
Hoffman described Zcash’s rise as a repricing linked to Bitcoin’s much larger value-storage market. According to his write-up, ZEC’s market capitalization grew from roughly $200 million to $26 billion. He argued that an asset at that size can move sharply if it attracts even a small reallocation from Bitcoin holders, given Bitcoin’s stated market capitalization of about $1.7 trillion.
The thesis depends less on Zcash replacing Bitcoin than on some Bitcoin holders seeking a related asset with different properties. Zcash uses cryptography that can shield transaction details when users choose protected transactions, giving the asset a privacy-focused use case that Bitcoin does not natively offer.
That potential demand is paired with substantial risks. Privacy coins face a more difficult regulatory and market-access environment than Bitcoin, particularly where platforms or service providers limit support for assets with transaction-obscuring functions. Zcash’s market value can also be more sensitive to changes in attention and liquidity than Bitcoin’s, making the same smaller market capitalization that appeals to traders a source of greater downside volatility.
Hoffman compared Zcash’s potential rerating to Ether’s surge in the previous cycle. He wrote that ETH rose from roughly $12 billion in market capitalization at its low to about $554 billion at its peak in 2021, as the market began pricing Ethereum as more than a secondary cryptocurrency. He also referenced an October 2021 comment by Three Arrows Capital co-founder Su Zhu about Bitcoin holders moving coins from cold storage to buy Ether while publicly preserving a Bitcoin-maximalist identity.
The parallel is suggestive rather than direct. Ethereum’s 2021 rally unfolded alongside rapid growth in decentralized finance, NFTs and stablecoin activity, which generated visible transaction demand on the network. Zcash would need to sustain a different type of demand: interest in privacy and a willingness among holders to treat it as a meaningful complement to Bitcoin.
near faces a more fragmented market
NEAR occupies the other side of Hoffman’s framework. He characterized the token as a smart-contract trade, placing it in competition for application, developer and user demand that has historically accrued to Ethereum and, increasingly, to other high-throughput chains.
This market has a different structure from Bitcoin’s value-storage category. A smart-contract network’s token can benefit from activity such as decentralized trading, lending, stablecoin transfers, gaming, consumer applications and fees paid to use the chain. Yet that activity is distributed across many networks, and the technical advantages of a chain do not automatically produce durable token demand.
Hoffman cited Solana’s pressure on Ethereum as evidence that smart-contract flows can fragment. Ethereum retains a large ecosystem, but Solana and other networks have shown that users and developers can move when lower fees, faster transactions or a particular application ecosystem becomes compelling. NEAR must compete within that environment rather than simply draw from one dominant pool of capital.
That makes NEAR’s upside case more dependent on execution. A privacy-focused asset can be traded largely on its monetary narrative, while a smart-contract platform needs sustained applications, liquidity and user activity to support long-term relevance. The distinction also means the two positions would be exposed to different catalysts even if both are part of a rotation away from Ether.
product growth may not lift legacy tokens equally
Hoffman listed Hyperliquid, Venice, Lighter, Ethena and Morpho as examples of newer projects generating activity. The list spans different parts of the market, including trading infrastructure, artificial-intelligence-related products, synthetic dollars and lending. Their emergence supports his broader view that crypto’s next growth phase may be driven by products outside the oldest base-layer networks.
Whether that activity translates into lasting value for the tokens associated with those networks remains an open question. Protocol usage, revenue, token ownership rights and token supply mechanics often diverge. A popular application can create substantial fees or user engagement without ensuring that its native token captures those benefits.
Hoffman set an expansive market backdrop for his thesis, writing that total cryptocurrency market capitalization would need to rise from $3 trillion to $30 trillion for value to be broadly reflected across the sector’s largest native assets. He also said he hoped the market could exceed $10 trillion during the current cycle.
Those targets illustrate the scale of capital required for another broad rerating of major tokens. In the nearer term, Hoffman’s allocation reflects a narrower proposition: capital seeking asymmetric returns may increasingly look beyond Bitcoin and Ether, but the trade-off is greater dependence on sector narratives, protocol execution and abrupt changes in market liquidity.
Explore how shifting from BTC and ETH to altcoins reshapes strategy—start with our altcoin insights in this guide.
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