Cryptocurrency Sector Divides: Hyperliquid ETF Approved, Capital Flows Back into DeFi?

On May 15, 2026, the cryptocurrency market experienced a significant sector rotation. According to SoSoValue data, the DeFi sector led the gains with a 5.15% increase over 24 hours, Hyperliquid (HYPE) surged by 19.02%, and TAC skyrocketed by 30.88%. Bitcoin (BTC) reclaimed the $81,000 level, while Ethereum (ETH) approached the $2,300 mark. Notably, the AI sector was the only major declining sector, falling by 2.18%. Behind this price performance, how are funds reallocating? What are the fundamental logic drivers behind the sector divergence?

What key events drove the DeFi sector’s leading performance?

The recent performance of the DeFi sector was largely catalyzed by the news of Bitwise launching a spot Hyperliquid ETF. On May 14, 2026, Bitwise announced the upcoming launch of the Bitwise Hyperliquid ETF (stock code: BHYP) on the New York Stock Exchange, offering 100% exposure to HYPE spot holdings, with an internal staking mechanism, an annual management fee of 0.34%, and a waiver of management fees for the first month on the first $500 million of assets. Hyperliquid, as a high-performance Layer 1 blockchain, processed approximately $2.9 trillion in transactions in 2025, a year-over-year increase of over 400%, and currently accounts for about 60% of the total open interest in derivatives on the chain. The ETF listing lowered the barrier for traditional institutional investors to access the Hyperliquid ecosystem, leading to expectations of increased capital inflow into this sector, which directly boosted HYPE’s price and lifted overall market sentiment in DeFi.

Is the decline in the AI sector merely a short-term correction or a structural adjustment?

The decline in the AI sector has multiple reasons. On one hand, AI narrative tokens experienced rapid gains earlier, and the market has entered a profit-taking phase, a natural correction after the narrative hype cooled. On the other hand, recently issued PreStocks tokens on Solana, representing shares in Anthropic and OpenAI, suffered severe drops—Anthropic PreStocks fell 34% in seven days, and OpenAI PreStocks declined 39%. Both companies explicitly stated that transferring shares to special purpose vehicles (SPVs) without board approval is invalid and warned that such third-party sales could constitute fraud or offer no real value. This incident exposed underlying asset rights issues in some AI token projects, raising regulatory concerns about the AI sector and weakening investor confidence in AI narrative tokens.

What are the fundamental valuation differences between DeFi and AI tracks?

Long-term, DeFi and AI tokens differ fundamentally in valuation logic. According to Gate Market data and market analysis, DeFi projects are driven by real revenue, with many blue-chip protocols offering annual yields of 4% to 12%, and some protocols generating an additional 5% to 20% through liquidity mining and lending demand. This model gives DeFi tokens a “yield asset” attribute, attracting long-term capital seeking stable returns. Conversely, AI tokens rely more on narrative and short-term speculative momentum. While they can experience pulse-like surges of 20% to 45% during rebounds, they tend to undergo more severe corrections during pullbacks, with higher volatility. Therefore, during capital rotations, AI tokens are more likely to be quickly withdrawn, whereas DeFi, with its yield mechanism, is more capable of retaining long-term capital.

What are the patterns of capital flow: narrative shifts and re-evaluation of allocation logic?

Capital flows between sectors are not random but are jointly influenced by macro environment, risk appetite, and narrative strength. Currently, AI tokens experienced a prolonged hype cycle from 2025 to early 2026, accumulating significant valuation premiums. As the AI narrative normalizes, marginal speculative capital growth has slowed. Meanwhile, DeFi has been undergoing structural rebuilding over recent quarters, with improvements in protocol revenue, user activity, and token buybacks, attracting yield-oriented capital again. This “cooling of high-momentum narratives” combined with “fundamental recovery” creates a resonance that drives capital out of AI and back into DeFi.

How will the structural divergence between sectors impact the market ecosystem?

The divergence between DeFi and AI reflects more than short-term capital flows; it indicates a structural split in the crypto market across different value dimensions. DeFi, as the infrastructure layer of crypto finance, derives its value from real economic activity—transaction volume, staking ratios, lending demand—supported by quantifiable fundamentals. In contrast, many AI tokens serve more as “narrative carriers,” with their value often disconnected from the actual progress of AI technology. As the market shifts from emotion-driven to fundamentals-driven valuation, the divergence in sector valuations may widen further, even prompting a reassessment of what crypto assets have long-term investment value.

At what stage is the current sector rotation?

Historically, crypto sector rotation tends to follow a pattern: “Bitcoin leads → mainstream assets follow → narrative-driven sectors explode → blue-chip sectors recover.” Currently, Bitcoin hovers around $81,000, a structural rebound in DeFi is underway, and the AI sector is in a correction phase after a decline. This rotation suggests the market is transitioning from an extreme narrative speculation phase toward a focus on yield and fundamentals. If liquidity conditions improve further, DeFi’s recovery could accelerate; if macro uncertainties intensify, capital may become more conservative, favoring sectors with stronger fundamentals and increasing downside risks for narrative-driven sectors.

What are the risks and strategic considerations amid sector divergence?

Whether it’s the leading DeFi sector or the declining AI sector, investors should adopt a more structural perspective. DeFi, despite its clear yield mechanisms, faces risks such as smart contract security, liquidity staking risks, and governance issues. AI projects, though under pressure now, still have long-term potential, especially those with strong compliance and clear underlying assets, as the trend of AI and blockchain integration persists. The key is to identify whether tokens have sustainable value capture mechanisms rather than chasing narrative hype. Sector divergence often signals a value discovery phase, where long-term opportunities are found in projects that maintain fundamental resilience amid market segmentation.

Summary

On May 15, 2026, the crypto market exhibited clear sector divergence—DeFi led with a 5.15% rise catalyzed by events like the approval of the Bitwise Hyperliquid ETF, while AI lagged due to narrative cooling and the PreStocks token crash, becoming the only major declining sector. The fundamental valuation difference—DeFi’s yield-driven model versus AI’s narrative-driven approach—is the core driver of capital flow, and this divergence trend may persist in the near future.

FAQ

Q: Is the rise of DeFi sustainable?

A: The sustainability of DeFi’s rise depends on the improvement of protocol fundamentals and overall liquidity conditions. If protocol revenues, user activity, and other indicators continue to improve, and macro liquidity remains stable, the sector could see ongoing structural recovery. However, given the high volatility of crypto markets, all trends carry correction risks, and investors should assess based on their risk tolerance.

Q: Is it worth paying attention to the AI sector after its decline?

A: There is significant differentiation within AI. Projects with clear use cases and strong compliance still have long-term potential. However, issues like asset rights exposed by PreStocks events warrant careful due diligence on underlying assets and legal compliance. The current decline mainly reflects a correction from prior speculative excess rather than a negation of AI-blockchain integration trends.

Q: What indicators should be monitored during sector rotation?

A: Key indicators include: (1) Total Value Locked (TVL) and its trends across sectors; (2) Protocol revenue and token buyback data of leading projects; (3) Flow of stablecoins between ecosystems; (4) Approval status of ETFs and traditional financial products; (5) Bitcoin’s price movements and their impact on overall market sentiment. These help assess capital allocation directions and the sustainability of sector rotation.