Cory Klippsten Says Altcoins Are 'Basically Dead' as Money as Crypto Becomes More Institutional
Key Takeaways
- •Cory Klippsten said altcoins are “basically dead” as competitors to Bitcoin as money.
- •He said centralized crypto businesses are likely to be absorbed into the same regulatory framework as traditional financial institutions.
- •Hyperliquid generated about $5.9 million in revenue over the past week and its HYPE token has risen about 130% year-to-date in 2026.
- •Wintermute reported that institutional counterparties accounted for 72% of spot trading flow on its OTC desk in the first half of 2026.
- •The article says institutional participation is concentrating liquidity in a narrower set of tokens, which could reduce the number of future altcoin winners.
Altcoins are “basically dead” as competitors to Bitcoin as money, according to Swan Bitcoin founder and CEO Cory Klippsten, who said the longer-term future of crypto and decentralized finance (DeFi) may be tied to integration with traditional finance.
Asked which altcoins could outperform the broader market, Klippsten pointed to Hyperliquid while arguing that centralized crypto businesses will ultimately fall under the same regulatory framework as traditional financial institutions.
“Hyperliquid is a business and it has a token. If it’s a business that’s centralized, it will eventually just get sucked up by TradFi and be thought of as an exchange and a bank,” Klippsten said.
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Hyperliquid generated about $5.9 million in revenue over the past week, ranking fifth among DeFi protocols by weekly revenue, according to DefiLlama. The HYPE token has also significantly outperformed Bitcoin in 2026, rising about 130% year-to-date while Bitcoin has fallen 28%, according to TradingView data.
Even so, the broader altcoin market appears to be becoming more selective as institutional capital plays a larger role, which matters because token performance is increasingly being judged alongside liquidity, use case, and the ability to fit within familiar market structures.
An X post from Bitwise CEO shared on May 17, 2026, said the crypto market has effectively split into four major segments: stablecoins and payments, Bitcoin as a macro asset, tokenization and on-chain finance, and blockchain infrastructure.
A July 2026 report from crypto market maker Wintermute found that institutional counterparties accounted for a record 72% of spot trading flow across all tokens on its OTC desk during the first half of 2026. That was up from 61% in the second half of 2025 and 59% in the first half of 2025.
Wintermute said institutional activity was concentrating in a narrower group of tokens while liquidity across the market’s “long tail” was weakening. The firm also reported that altcoin options notional traded on its desk increased about 3.4 times from the second half of 2025, largely driven by yield strategies.
That shift suggests future altcoin rallies may look very different from those seen in earlier cycles. Rather than capital broadly rotating from Bitcoin into Ethereum and then into smaller tokens, institutional money is increasingly concentrating on assets with deeper liquidity and stronger market demand.
That trend has also appeared in BitKE’s coverage of institutional crypto adoption, including the growing share of Bitcoin held by institutions and the expanding role of regulated investment products.
Wintermute’s findings support a broader view that crypto may not be disappearing, but the market is becoming more institutional. The result could be fewer altcoin winners, narrower rallies, and a growing convergence between crypto businesses and traditional financial markets.
Klippsten and Swan Bitcoin have previously been credited with identifying major structural risks ahead of several high-profile collapses.
Swan published an analysis titled “Dark Moon: The Inevitable Collapse of Luna” before Terra/Luna collapsed in May 2022. Klippsten was publicly criticizing the sustainability of the Terra ecosystem well before its eventual implosion. LUNA/UST later fell from roughly $50 billion in combined market capitalization to essentially zero.
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In June 2022, shortly before Celsius froze withdrawals, Klippsten publicly argued that Celsius did not have sufficient liquidity to meet customer withdrawals. Reuters quoted him during the crisis describing crypto as essentially a highly leveraged system with contagion risk. TechCrunch also reported Klippsten warning that Celsius could become insolvent if it had to meet all customer redemption requests. Celsius later froze withdrawals and filed for bankruptcy. The company’s founder, Alex Mashinsky, later pleaded guilty to fraud.
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Before FTX collapsed, Klippsten was also publicly criticizing Sam Bankman-Fried and FTX. When CoinDesk published its November 2022 investigation into Alameda’s balance sheet, Klippsten pointed to the extraordinary dependence of Alameda’s equity on FTT, a token controlled by FTX itself. FTX later collapsed, and investigations established that customer funds had been improperly diverted to Alameda.
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Swan’s and Klippsten’s strongest track record has been in identifying structural risks rather than predicting Bitcoin’s price.
For Bitcoin, that may reinforce its position as the industry’s primary monetary asset while other crypto networks increasingly compete on their ability to function as financial infrastructure rather than alternative forms of money.
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