I debated whether or not a human/fish hybrid would be too fantasy based, as most cryptids at least have some scientific explanation. There seemed to be no way to rationalize the combination of the two vastly different creatures. In the end, I thought of the "manatee-as-mermaid" myth and realized I could just combine the features of a primate with those of a seal or dolphin.
The story is that these guys evolved from primates that lived on small islands and learned to dive deep for shellfish. Unlike dolphins and seals, the Merfolk had already developed opposable thumbs before making the slow transition to an aquatic species. This proved to be a huge advantage in foraging, and in combination with dolphin-level intelligence, even allowed a complex social system to flourish.
