The Architect’s Phase
Market Health, Stablecoin Evolution, and the Rise of Perps
Aloha friends,
There has been very little change over the last week, largely due to the Easter break and the persistent uncertainty hanging over the global markets. The stock market attempted a downward move but rallied back following a series of posts on X. Between volatile market sentiment and a very irritating post from President Trump via Truth Social, forecasting the immediate week ahead is almost impossible.
As my core thesis remains the same, I want to pivot today. There is a saying that fortunes are made in bull markets, but they are designed in bear markets. While I remain patient with my cash allocation, waiting does not mean doing nothing. It is the perfect time to look “under the hood” of the entire ecosystem to see where the real value is hiding.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.
Market Health
To understand the health of the market beyond Bitcoin, we have to analyze the distribution of the current $2.29 trillion total crypto market cap.
Out of this, we have the following distribution:
BTC: 59%
L1s: 25%
Stablecoins: 14%
DeFi: 2%
The total market cap is down 46,5% from its $4.28 trillion peak. This is remarkably consistent with the 2021/2022 cycle, which was down 40% at this same 5.5-month mark. If we follow the historical “peak-to-trough” decline patterns of 2018 and 2022, we could see the total market cap fall roughly 62% from its peak to around $1.62 trillion. This would represent a further 30% decline from current levels, placing us exactly where history suggests we should be in this bear market.
Stablecoins
Everyone is bullish on stablecoins, and for good reason. Supply has surged by $192 billion over the last 2.5 years to an All-Time High (ATH) of $317 billion. Despite the downtrend in total crypto market cap, stablecoins have maintained their momentum.
However, we are now entering a sideways phase that mirrors previous cycles:
In the ‘21 cycle, stablecoin supply peaked in April 2022, nearly five months after Bitcoin’s top
In the current cycle, we are also five months past the BTC top and flatlining as capital flows stall in “risk-off” mode and leverage unwinds
The game-changer here is real-world utility. Stablecoins are rapidly becoming the preferred rail for cross-border payments and remittances. Because of this, seeing a “mint” alert on X for USDT doesn’t necessarily signal an immediate market pump anymore; it could simply be liquidity for global commerce.
Regulation & Institutional Moves
The GENIUS Act now prohibits U.S. stablecoin issuers from sharing yield with holders. While this supports the business models of giants like Circle and Tether, it creates a disadvantage for the end-user.
Interestingly, Tether recently hired KPMG as its auditor, sparking rumors of a potential IPO. We also expect them to launch a U.S.-compliant stablecoin to wrap around services like payroll, e-commerce, and banking.
A lot of building is being done, which eventually will lead to a further growth of stabelcoins and could trigger a fight with the traditional banking industry as they lose their old ways of extracting fees.
Perpetual Futures Markets
If stablecoins are the infrastructure, Perpetual Futures (Perps) are the energy. A perp is a derivative with no expiry date that uses a funding rate to stay in line with the spot price. They have stripped away complexity: no time decay, no expiry dates, allowing liquidity to concentrate 24/7.
For retail, this is the ultimate speculative tool. The crypto perps market grew 75% between January 2024 and January 2026, reaching volumes of $7.24 trillion. More importantly, Perp DEXs have increased their volume 8-fold, capturing 10.2% of the total market share.
The Rise of Hyperliquid
Hyperliquid has become the dominant force in this space, accounting for roughly 60% of DEX volume. Why is that so? Well, Hyperliquid is all and foremost one thing: Easy to use. One feature many exchanges and crypto services lack.
Perp volumes are currently 4x daily spot volumes
Retail energy is shifting: while Ethereum owned the ‘21 cycle and Solana the ‘25 cycle, the “animal spirits” are now converging on Hyperliquid
HIP-3 & HyperEVM: Hyperliquid is expanding into a full financial system, allowing permissionless markets for commodities (oil, gold, silver), equities, and indices
Final Thoughts
The overall crypto market is in good shape, following a predictable structural path (as mentioned many times before). I see massive growth ahead for stablecoins in payments & remittance. Perps might be the narrative driver for the next bull run. This is why I am closely monitoring Perps platforms like Hyperliquid.
Bear markets are for deep research. The next bull run won’t look like the last one; it will be driven by the integration of modular markets and sophisticated on-chain derivatives.
Portfolio Management
No changes this week. My defensive stance remains, but my research is accelerating.
That’s it for today - I hope I could deliver some valuable insights.
Maloha
Stay Humble. Stay Curious. Enjoy the Journey.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.