Arthur Hayes, co-founder of BitMEX exchange and head of investment strategy at Maelstrom Fund, has officially confirmed the complete liquidation of his 'Holy Trinity' portfolio - selling his entire Zcash (ZEC), Hyperliquid (HYPE), and NEAR Protocol (NEAR) positions. As confirmed on X, Hayes sold ZEC after discovering a critical vulnerability in the Orchard Pool that could theoretically allow unauthorized minting - though the probability of exploitation is described as extremely low but not cryptographically impossible. The decision came after Hayes cited higher energy prices from the Iran war, a wave of AI initial public offerings, and an expected market top between now and September. The 'Holy Trinity' trade, which included HYPE, ZEC, and NEAR, lasted approximately 6 days - a new personal record for Hayes. As per CryptoHayes, he framed the ZEC exit as conditional, stating he would re-evaluate and could rebuy at lower prices if his assumptions proved wrong. Hayes has now confirmed he continues to hold Worldcoin (WLD), though he did not elaborate on that position.
The announcement immediately impacted cryptocurrency markets, with HYPE token trading near $66.7 after the latest sell-off, accumulating a drop of about 10% from its recent highs above $75. As reported by CoinGlass, over $26 million worth of HYPE crypto was liquidated in the last 24 hours, with spot flows consistently in the red over the last 7 days. The asset had previously registered an all-time high above $75, driven by increased institutional demand. NEAR experienced a sharp correction after his departure, reversing some of the gains made after Hayes publicly supported the project. NEAR fell around 17% to 19% on June 4, while HYPE slid between 6% and 11% after the announcement. The HYPE flow showed up on-chain, with 247,334 HYPE tokens worth roughly $18 million moving to Bybit and OKX deposit addresses, with $66 million worth of net outflows on June 2 representing the highest daily outflows. Following Hayes's confirmation of the ZEC sale, ZEC experienced a modest sell-off with normal trading volumes, though the market reaction remained measured compared to previous exits.
The Zcash sale was triggered by a soundness bug in the Orchard shielded pool's zero-knowledge proof circuit, found in the elliptic curve gadget of the Halo2 system. Independent researcher Taylor Hornby discovered the flaw on May 29, 2026, during an AI-assisted audit for Shielded Labs. While the bug could theoretically allow invalid state transitions like undetected minting, no exploit occurred and total ZEC supply remained intact. The Zcash Foundation moved quickly, deploying an emergency soft fork on June 1 to pause Orchard transactions, then activating the NU6.2 hard fork around June 3 with a corrected circuit. However, Hayes argued that the network could not cryptographically prove that zero prior minting had occurred, stating that 'privacy coins demand perfection not probability' - even a low-probability risk pushed Maelstrom to exit fully. ZEC had become Maelstrom's second-largest liquid holding after Bitcoin as of November 2025, making the full exit a sharp reversal for the fund. The Orchard Pool bug represents a critical vulnerability for Zcash, as it relies on this mechanism to enable private transfers, and any theoretical exploit could compromise the entire privacy guarantee that the coin is built upon.
Hayes has joined the growing list of analysts viewing the upcoming SpaceX IPO as a bearish catalyst for the crypto market, forcing him to rebalance his altcoin portfolio. According to CoinDesk, he stated that the upcoming IPOs (SpaceX, Anthropic, and OpenAI) have forced him to take profits across his altcoin positions. For the SpaceX IPO scheduled for next week, Hayes remains bullish on Worldcoin (WLD), noting that the SpaceX IPO is going to melt people's faces off. The altcoin surged 12% in the past 24 hours following his comments, with Hayes holding WLD through the upcoming listing. However, traders should note that Hayes's comments are sometimes viewed as contrarian cues, as his previous bullish posts on HYPE were immediately followed by massive sell-offs by his fund. This pattern has led some market watchers to view his bullish posts as signals for exit liquidity rather than genuine bullish signals.
The AI IPO-driven pressure has created a challenging environment for altcoin investors, with Altcoin Exchange Inflows dropping across all exchanges including Binance and Coinbase as Bitcoin extended its plunge to February lows. According to CryptoQuant, altcoin traders were in a risk-off mode as Bitcoin dropped, with the altcoin season index nearly at a neutral level of 49 despite this week's pullback. The metric, while a lagging indicator, showed the relative strength of the altcoin sector amid Bitcoin's crash. However, the potential bearish pressure from AI IPOs has been well documented by other reputable analysts, with the sequence of exits leaving Worldcoin as one of the few publicly confirmed major positions still held by Maelstrom. Traders now watch for signals on whether Hayes will maintain or repeat the pattern of rapid portfolio rotation, with some expecting WLD to be the next token after his rapid exits across other major positions. The debate among crypto analysts has intensified following Hayes's exit, with some arguing that his decision signals broader concerns about privacy coins' technical resilience, while others view it as an overreaction to a low-risk edge case.
