The Era of Universal Bull Market Ends: Who is Redefining the Pricing Power of Altcoins?

Privacy premiums, protocol revenues, and buyback destruction are becoming new anchors for capital.

Written by: Cooper Duschang

Compiled by: Saoirse, Foresight News

Bitcoin accounts for about 56% of the total market capitalization of cryptocurrencies. For a long time, analysis in the crypto market has largely revolved around Bitcoin's performance and its response to macroeconomic conditions. Although Bitcoin is massive, it does not equate to the entire crypto industry.

In previous bull market cycles, capital generally flowed first into blue-chip cryptocurrencies like BTC, ETH, and SOL, before rotating into altcoins. This logic has now changed. Altcoins are now receiving attention that sometimes rivals or even surpasses that of major cryptocurrencies. The numerous niche segments covered by altcoins provide ample opportunities for investors to seek excess returns.

Recently, the market has turned bullish, with capital's interest in altcoins highly concentrated in a few niches and protocols. This article will analyze the driving factors behind the trends in privacy coins and meme coins, examine the market's shift from speculation on meme coins to a focus on revenue-generating protocols, and introduce how some protocols utilize revenue for token buybacks, returning value to token holders.

Privacy Coins

Blockchain has anonymous characteristics, allowing third parties to identify users' consumption patterns, trading partners, and other information, which limits sensitive transactions that can be conducted on-chain. The Zcash network is one of the mainstream privacy protection solutions. Zcash forked from the Bitcoin codebase in 2016, introducing optional privacy transactions and privacy address features; so far this year, Zcash has achieved a return of 218%.

ZEC futures positions and spot trading volume surged significantly from November 2025, with futures open interest continuously hitting new highs, and the funding rate turning negative multiple times during this period.

Data Source: Talos CM Market Data Pro

ZEC futures saw a surge in popularity in October 2025, with the open contract size surpassing $300 million before 2026; after a round of correction following a negative funding rate, the position size continued to rise, now exceeding $2 billion.

The proportion of ZEC shielded circulation has been steadily increasing, with a significant surge in shielded transactions and fully shielded transactions in August 2026.

Data Source: Talos CM Network Data Pro

Zcash's two core privacy tools are: shielded pools and shielded transactions. Shielded pools offer customized encryption security and privacy attributes; shielded transactions rely on zero-knowledge proofs to hide transaction participants, transfer amounts, and other transaction details.

In 2026, the stock of shielded ZEC reached a new high, with slightly over 30% of ZEC stored in shielded privacy addresses; shielded transactions accounted for 52% of Zcash's total transaction volume, reflecting users' acceptance of privacy technology. As the crypto market warmed up in August 2026, the usage of privacy transactions also saw a surge.

Meme Coins

Historically, meme coins have helped public chains kickstart liquidity and attract capital. Platforms dedicated to issuing meme coins for various ecosystems have rapidly emerged, with users flocking to Pump.fun on Solana and Pons on the Robinhood chain, with the PUMP token increasing by 134% this year.

The returns of 50 meme coins in 2026 have polarized, with only a few surging while most recorded negative returns.

Data Source: Talos CM Prices

However, the internal performance of meme coins varies significantly, with only a few tokens achieving positive returns. According to Morningstar's classification statistics, the median return rate for meme coins is -27%.

Some popular meme coins have explored new market-making models: creating trading pools with their tokens and tokenized stocks. This approach is popular on the Robinhood chain, manipulating the circulation of tokenized stocks while simultaneously driving up the prices of meme coins and tokenized stocks.

The image illustrates the operational logic of using meme coin trading pools to lock up tokenized stocks, creating circulation pressure that drives real securities market buying demand.

For example: Developers set up a Uniswap trading pool for “Meme / AMC Tokenized Stock (AMC)”. Users buy AMC tokenized stocks and exchange meme tokens in the pool. The more AMC in the pool, the fewer AMC available for exchange, pushing up the price of meme coins. Investors rush to buy meme coins, which consumes the limited AMC tokenized stocks, driving up their price. Market makers, to meet the market's demand for AMC, need to buy real AMC stocks in the traditional securities market and mint tokenized versions to sell to traders. This buying pressure attempts to leverage the price of on-chain tokenized assets to drive the market for real AMC stocks.

Revenue-Generating Protocols

On the other side of the market, investors are also optimistic about protocols that have successfully commercialized, including meme coin issuance platforms.

Uniswap's unified proposal allows protocols to extract a portion of the transaction fees from v2 and v3 trading pools. Once the fee switch is activated, Uniswap can fund various projects and ecosystem incentives, promoting protocol development. In August 2026, v3 pools contributed approximately 47% of Uniswap's trading volume on the Ethereum network.

The chart shows the monthly trading volume changes of various versions of Uniswap on Ethereum, with V4 trading volume rapidly increasing, V2 continuing to decline, and V3 contributing the majority of trading volume over the long term.

Data Source: Talos CM Market Data Pro

Lending protocols also achieve stable cash flow. Aave sets reserve factors in various lending markets, extracting a portion of the interest paid by borrowers into the treasury. Stablecoin lending is popular due to its price stability and deep liquidity; on the Ethereum Aave platform, five stablecoins contribute 68% of the fee income, with Aave's Ethereum lending business expected to generate $47 million in revenue annually.

Aave v3's estimated daily income from various reserve assets continues to rise, with stablecoins like USDC and USDT being the main sources of income.

Data Source: Talos CM Network Data Pro

Token Buybacks and Destruction

A common practice today is for protocols to use business revenue to buy back tokens in the secondary market, executing destruction and reducing the total circulation. More and more protocols are launching buyback plans to return value to token holders.

The chart compares the weekly trading volume of the entire market with the price of HYPE, showing a trend of rising HYPE prices, with the platform's weekly trading volume experiencing multiple spikes.

Data Source: Talos CM Market Data Pro

Hyperliquid continues to use revenue to buy back and destroy HYPE tokens, with revenue sources including:

• Transaction Fees: Transaction fees generated from the HyperCore market, HIP-3 HyperEVM market, and HIP-4 results market, part of which goes to Hyperliquid;
• HIP-1, HIP-3 Auctions: Developers stake HYPE to participate in auctions, only winning bidders have the right to launch spot and perpetual contract markets on HyperEVM; the HYPE staked by winning bidders is directly destroyed;
• USDC as AQAv2 Aligned Quoting Asset: Hyperliquid's USDC reserves generate returns from US Treasuries and short-term bonds, with Circle and Coinbase needing to distribute about 90% of reserve returns to Hyperliquid;
• HyperEVM Network Fees: Hyperliquid validator nodes participating in network security collect transaction fees for interactions on the HyperEVM chain.

Uniswap, Aave, and other revenue-generating protocols are also conducting token buybacks and destruction. On the Ethereum chain, Uniswap has already destroyed over $12 million worth of UNI tokens. The guidelines issued by the U.S. SEC indicate that protocols operating normally conducting token buybacks may not necessarily be classified as securities.

The chart shows the number of UNI tokens destroyed through the fee switch, with daily destruction values experiencing pulse peaks, and cumulative destruction amounts continuing to grow.

Data Source: Talos CM Market Data Pro

Outlook

This round of altcoin rebound is of higher quality and more concentrated than before. Meme coins still account for a portion of the gains, but the market has clearly shifted towards protocol tokens with core narratives that can generate business revenue; the income earned by protocols will be reinvested into the ecosystem or used for token buybacks and destruction, feeding back into the development of the protocols.