Bitwise CIO: Crypto valuations could double as protocols link revenue to tokens

Bitwise Chief Investment Officer Matt Hougan expects crypto valuations to at least double as decentralized protocols increasingly use revenue to fund token buybacks and burns, he said Wednesday.

Hougan said crypto outside of Bitcoin is becoming a revenue-driven market where network activity feeds into native-token value. Investors have not priced in that change, leaving some assets undervalued, he added.

He pointed to Hyperliquid, Uniswap, Aave, and Pump.fun as protocols that already use fees to repurchase or remove tokens from circulation. Over the next 12 to 24 months, Hougan expects decentralized finance applications and layer-1 networks to adopt similar mechanisms.

Stronger links between protocol revenue and token value could give investors conventional valuation metrics, Hougan said. He noted that token holders lack shareholders' legal claims to cash flow and that community-set tokenomics can change.

Hyperliquid, the decentralized exchange that generated over $800 million in revenue last year, uses about 99% of this to buy and burn HYPE. On Aug. 6, Hyperliquid reported $169 million in second-quarter revenue and directed $141 million toward HYPE buybacks.