Altcoins rally as US policies support crypto

David Hoffman, co-founder of Bankless, said on Sept. 18 that the cryptocurrency market had moved into an altcoin season earlier than he expected, following sharp gains in decentralized finance, privacy, perpetual-trading and AI-linked tokens. The move has lifted assets including Hyperliquid’s HYPE, Uniswap’s UNI, NEAR, Zcash’s ZEC and Venice AI’s VVV while Bitcoin and Ether also traded higher.

Hoffman’s call followed a rotation he disclosed in May, when he said he had sold his Ether holdings and reallocated into VVV, NEAR, ZEC, HYPE and LIT. Each of those tokens later outperformed ETH during the reported rally, though the gains varied widely and came after significant volatility across smaller-cap digital assets.

Bitcoin was reported above $81,000 and Ether above $2,600 during the move. UNI rose nearly 35% in one day, while Arbitrum’s ARB and NEAR each gained more than 20%. The breadth of the advance extended beyond a single blockchain or theme, but the strongest moves clustered around protocols with clearer links to trading activity, privacy tools and potential protocol revenue.

Perpetual-trading tokens lead the move

HYPE was among the largest beneficiaries. The token traded near $92 after climbing above $94 the previous evening, according to the market update, setting a new all-time high. About a month earlier, HYPE had traded near $73.

Hyperliquid’s rise has coincided with rapid growth in markets built under its HIP-3 framework, which enables permissionless deployment of perpetual futures markets. The supplied figures placed open interest on the platform at $16.36 billion, a record level. Open interest measures the value of outstanding derivatives contracts and can indicate growing participation, though it can also amplify losses when positions are heavily leveraged.

HIP-3 markets reportedly accounted for nearly half of Hyperliquid’s perpetual-contract volume during the summer of 2026, up from roughly 2% at the beginning of the year. TradeXYZ-led products, including Nasdaq 100 index contracts and single-stock-linked markets, have been central to that expansion.

Those products place onchain perpetual trading closer to conventional equity-market themes. They do not give users ownership of shares, but they allow traders to take long or short positions on price movements through a crypto-native derivatives structure. That model has increased the range of markets available on decentralized venues while also introducing the familiar risks of funding-rate swings, liquidations and volatile pricing around underlying stock-market hours.

The report also cited Hyperliquid’s assistance fund as having carried out more than $1.3 billion in cumulative HYPE purchases and burns. Buyback-and-burn mechanisms can reduce circulating supply when tokens are removed permanently, although their market effect depends on the scale of purchases, future revenue and the amount of token supply held by early participants.

PURR, another asset associated with the Hyperliquid ecosystem, rose more than 20% at its peak during the same period.

Privacy becomes a major part of the rotation

Zcash was reported near $1,536 after an intraday high of $1,595, following a gain of more than 2,500% over the previous year. The update placed ZEC eighth by cryptocurrency market capitalization and described it as the only privacy-focused token in the current cycle to trade above $1,000.

The rally has drawn attention to developments around Zcash-related businesses as well as the token itself. Fortitude, a Zcash-mining firm, was described as advancing listing plans and appointing former Hut 8 chief executive Jaime Leverton as its CEO, with a Nasdaq listing intended. Separately, Garret Jin disclosed ZEC holdings of more than $300 million, equal to roughly 202,100 tokens based on the figures in the report.

NEAR added a different privacy angle. Near Protocol said in a Sept. 18 post that perpetual-contract trading now defaults to privacy protection, allowing users to open positions from existing accounts without making the ownership of those positions visible to other users. The feature was described as being supported by Hyperliquid.

That design addresses a practical issue for larger onchain traders: publicly visible wallets can reveal positions, collateral movements and trading strategies. Privacy at the account or position level could make decentralized derivatives more usable for firms and individuals reluctant to expose every trade on a public ledger. It also raises implementation and compliance questions that protocols will need to address as privacy tools become more integrated with high-volume trading.

Venice AI’s VVV token also participated in the rotation, trading around $27.50. Venice AI operates in the Base ecosystem and describes its product as privacy-focused AI infrastructure. VVV is used for staking, governance and payment for private computing resources, according to the project’s stated token utility.

defi governance tokens regain attention

Uniswap’s UNI traded near $9 after renewed discussion of the protocol’s fee switch, a mechanism that could direct a portion of trading fees to UNI holders if activated through governance. The prospect of cash-flow-linked token economics has repeatedly shaped UNI’s valuation debate, even though a fee switch requires governance decisions and implementation rather than occurring automatically.

Uniswap v4, rolled out in July, introduced Permissioned Pools designed for regulated or restricted trading environments. The partners named in the supplied material included Superstate, Securitize and Dowgo. Such pools could give tokenized-asset issuers more control over who can access liquidity while retaining some of the composability associated with decentralized finance.

MORPHO, a lending protocol, traded around $2.70. Morpho uses a hybrid system that combines peer-to-peer matching with pooled liquidity, seeking to improve capital efficiency compared with lending markets that rely solely on shared pools. Its appeal in the current market has been tied to the view that onchain credit infrastructure may benefit if tokenized funds and other regulated digital assets require deeper lending and collateral markets.

LIT also rose sharply, trading just below $5.20 after changing hands near $2.65 in July. The project’s supply was listed at 1 billion tokens, with 250 million distributed through an unlocked airdrop at token generation. Such a large freely tradable allocation can increase liquidity, but it also leaves prices more exposed to rapid selling or speculative demand.

Leverage has not reached prior warning levels

The advance has brought a visible increase in risk-taking, but Glassnode said altcoin leverage remained below levels it associates with an overheated market. The blockchain analytics firm said prior peaks have tended to occur when the gap between altcoin open-interest share and Bitcoin’s narrows to within a few percentage points.

That gap was described as remaining between negative 10% and negative 15%, leaving it well short of the condition Glassnode identified as a more mature leverage-driven phase. The distinction matters because the recent rally has involved large price gains, yet the derivatives positioning described by Glassnode suggests the market has not reached the same concentration of speculative leverage seen near earlier cycle extremes.

PUMP, the token linked to a Solana-based meme-token launchpad, traded around $0.004 and remained below its previous all-time high. The project has used buybacks and recently introduced a stock-token issuance model, according to the supplied material. Its performance underscores the uneven nature of the rally: protocols connected to high-volume trading and token supply reduction have attracted demand, while many assets remain far below earlier peaks.

The current rotation has rewarded tokens tied to specific onchain activity rather than simply lifting every alternative cryptocurrency equally. Whether that pattern persists will depend less on broad altcoin enthusiasm than on whether derivatives volumes, defi fees, privacy products and tokenized-market activity continue to generate usage beyond a short-lived trading surge.