Hyperliquid top trader says options market could grow 5-10x crypto-wide next year

Avoiding blowups, not chasing home runs

KoolKrypto, described in the episode as a top-100 Hyperliquid perp P&L trader, tells David Hoffman that his ranking is less about catching huge trades and more about risk control. He says he "literally never" uses more than 1x leverage across his portfolio and that most top traders on the leaderboard simply avoided large losses rather than capitalized on huge wins. He notes some of his perp P&L actually came from hedging Hyperliquid spot holdings with local-top shorts rather than any single giant directional bet.

Asked whether leaderboard data is useful signal, he says it has "a little bit of signal" but is often distorted by delta-neutral funding-rate arbitrage funds being mistaken for directional whales. He says he spends more time watching large position holders after he already has exposure to a ticker, rather than using leaderboard-watching to find new trades.

The "revenue meta" and how he values tokens

KoolKrypto says his background is DeFi-native, having started a fund years ago betting on a rotation into revenue-generating tokens — a thesis he admits he was early and wrong about for a long time before 2026 vindicated it. He now argues midterm election results could spark a rotation out of revenue-meta tokens, which he says are more exposed to regulation, and into "store of value" tokens like Bitcoin and Zcash, which benefitted from a broader move he compares to a gold rally.

He pushes back on a strict binary between "money" tokens and "revenue" tokens, citing Ethereum as a token that doesn't fit cleanly into either bucket.

The bull and bear case for Zcash

KoolKrypto argues Zcash currently sits in "the perfect setup" narrative-wise, combining privacy and quantum-resistance themes, but says it is "such a crowded consensus crypto trade" that it needs genuine external capital, not more crypto insiders, to re-rate higher. He points to wealthy individuals outside crypto, citing Naval as a figure associated with Zcash interest, as the kind of buyer that could move the asset without needing mass retail adoption.

Hoffman counters that Zcash could be framed as a percentage of Bitcoin's market cap, arguing Bitcoiners occasionally defect into new assets, as some did into Ether in 2021, and that it wouldn't take much capital to push Zcash to "three, four, five%" of Bitcoin's value. KoolKrypto agrees but flags that it's hard to know how much of that defection has already happened.

He also raises a bear case: Zcash's code isn't as "ossified" as Bitcoin's, raising attack-surface risk, as seen in what he calls "the whole Orchard fiasco," and that it lacks a fundamental price floor the way revenue-generating, buyback-funded tokens do.

"Zcash can't really just kind of go up at like a 10% kagger... it's kind of just either going to like step function up... or it's just kind of going to bleed out."

— KoolKrypto. He says he expresses his Zcash view through options rather than perps, because options let him target large multiples ("10,000," "5,000" are cited as levels others discuss) without liquidation risk during the expected 60-70% drawdowns along the way.

Valuing exchange tokens: buybacks change the math

KoolKrypto says he finds the most edge in revenue-generating "decks" tokens — Hyperliquid, Lighter, Derive — because many investors mis-contextualize why they trade at different multiples. He argues Hyperliquid's HIP-3/USDC-linked revenue is more durable, like treasury yield, than Lighter's, which he says is one reason Lighter trades at a lower multiple. He also says Pump's revenue is discounted because markets assume meme-coin revenue cannibalizes its own future.

He says tokens with aggressive buybacks relative to revenue, such as Hyperliquid, Derive, Lighter and Arrow, don't need broad recognition to re-rate because cheap buybacks automatically manifest in price: "hype is buying three times as much hype back when it was trading at you know 30 bucks than when it's trading at 90 bucks." He adds that fundamental data rewards being early and contrarian, unlike technical levels, where he says it pays to watch the same signals everyone else watches.

Hyperliquid vs Lighter

KoolKrypto calls Lighter "a better hold for the next 3 to 6 months," partly because he views Hyperliquid as having been somewhat politically aligned with the Trump administration, which he suggests could shift under changing political winds, while Lighter may have a cleaner path to regulatory clarity. He flags a possible bear case for Lighter too: the untapped US retail perp market may be smaller than assumed, since users already access offshore venues via VPN.

Longer term, he says he trusts the Hyperliquid team more and would rather hold hype in a multi-year coma trade than lighter's token, comparing Hyperliquid's potential trajectory to Binance's offshore dominance. He stresses that liquidity depth is a bigger moat than feature superiority, noting he still trades mostly on Hyperliquid despite preferring Lighter's UI.

Options as the next growth frontier

KoolKrypto says perp markets are closer to saturation, citing the lingering hit to open interest and volume from "1010" (an event he says killed a lot of perp OI), while options adoption is on "a straight hockey stick" trajectory. He argues even derive bulls underestimate how much the options market could grow, suggesting it "could very easily 5 to 10x next year," though he doubts Derive keeps its current roughly 90-95% market share of options notional as competition from Lighter, Paradex's Dime, Hyperliquid's Synapse, and Variational Pro intensifies.

He says Hyperliquid's architecture isn't well suited to native options and expects the team to eventually enter the market, but likely 9-12 months behind Lighter, which he says is explicitly building options alongside its Robinhood partnership.

Macro setup: "maximum risk, maximum reward"

Looking ahead to the rest of 2026, KoolKrypto says crypto sits at a "peak career risk" moment for institutional allocators: a potential cooling of the AI bubble could free up risk-seeking capital that previously favored semiconductors and AI stocks over crypto. He notes Bitcoin is still trading well below its all-time high, unlike broader tech, implying crypto already front-ran part of its own correction.

He frames the key open question as whether the revenue meta has topped in favor of store-of-value trades like Zcash, or whether both Zcash and hype are simply the most crowded, vulnerable assets if crypto falls further.

"If you're right, you're right gigantically and if you're wrong, you're also kind of wrong gigantically."

— KoolKrypto, leaving the direction of the next three to six months explicitly unresolved.