Bitwise CIO says Wall Street’s onchain push may shape crypto’s next cycle
Matt Hougan argues that stablecoins, tokenization and revenue-generating protocols could drive a slower but larger crypto upswing.
By Dev Ramirez · Crypto Correspondent
· 3 min read
Bitwise Chief Investment Officer Matt Hougan says the next major crypto upswing may come from traditional finance using blockchains, rather than another wave of pure speculation. For everyday investors, that shifts the focus from price action alone to whether crypto networks and tokens are tied to real financial activity.
In a new memo, Hougan argued that the next cycle could be powered by the overlap between traditional finance and onchain finance. “Onchain” means transactions and assets are recorded on a blockchain. His list of drivers includes stablecoins, which are tokens designed to track currencies like the dollar; tokenization, which means putting assets such as funds or securities into blockchain-based form; round-the-clock trading; faster settlement; and institutional DeFi, short for decentralized finance, or blockchain-based financial services.
Hougan’s case, as summarized by Decrypt’s Morning Minute newsletter, is that a cycle built on revenue and financial use could end up larger than earlier rallies, even if it develops more slowly and with less volatility. That is an argument, not a guaranteed outcome.
Two paths for the next cycle
Hougan framed the opportunity in two categories. The first is what he called the “Hyperliquid Lane,” referring to crypto-native protocols that produce revenue and send much of that value back toward their own tokens.
Decrypt’s newsletter cited Hyperliquid as the main example, saying the protocol passed $1 billion in cumulative revenue in June, is on track for about $800 million this year, and uses 99% of its revenue to buy HYPE in the open market. That mechanism matters because some crypto apps generate fees without creating a clear reason for their tokens to be used or held.
The newsletter also named Uniswap, Aave and Morpho as protocols moving in a similar direction, along with Pump.fun. Uniswap is a decentralized exchange, Aave is a lending protocol and Morpho is also focused on onchain lending markets.
The second category is what Hougan called the “Robinhood Lane.” That refers to established financial companies building products on blockchain systems rather than only testing small pilots. Robinhood Chain, according to the newsletter, went live on July 1 and has already topped $3 billion in volume.
Market backdrop stays calm
Hougan’s memo arrived with large crypto assets trading in a narrow range. Decrypt’s price data, supplied by CoinGecko, showed Bitcoin near $65,500 and Ether around $1,924, while the newsletter said major cryptocurrencies were mostly flat even as stocks fell and oil prices rose.
The same morning roundup said Bitcoin exchange-traded funds, or ETFs, had recorded seven straight days of inflows. An ETF is a fund that trades on an exchange and gives investors exposure to an asset through a brokerage account. It also said Ethereum’s validator exit queue had fallen to zero, meaning there was no listed backlog of validators waiting to stop staking.
Other policy and market items in Decrypt’s roundup included a new Senate Republican draft of the Clarity Act, continued opposition from Democratic leaders, and a warning from SEC Commissioner Pierce that some DeFi vaults and onchain lending products may fall under securities law.
This story draws on original reporting from Decrypt.
