The Chief Investment Officer of Bitwise, Matt Hougan, highlighted two investment areas in the cryptocurrency sector that could benefit from the upcoming bullish phase of the market. These sectors focus on crypto applications generating real revenue and on established companies utilizing blockchain infrastructures. Hougan also mentions the convergence between on-chain finance and traditional finance as a key factor in this evolution.
Crypto Applications Generating Revenue
The first area of interest for Hougan concerns crypto applications that are able to generate real revenue through a tokenomics that ties the token’s value to its usage. The expert cited Hyperliquid (HYPE) as a model example to follow. This platform, operating on a Layer-1 blockchain, specializes in trading perpetual contracts and is forecasted to achieve nearly $800 million in annual revenue this year. Impressively, a large portion of this revenue is reinvested in buying back the HYPE token.
This economic model seems to be paying off, particularly regarding HYPE’s performance, which has recorded an increase of about 146% this year, despite a generally declining crypto market. Hougan believes that this token could potentially double in value while remaining fairly valued. He also predicts that a new wave of crypto assets may draw inspiration from HYPE’s tokenomics, paving the way for “next-generation” token opportunities.
Moreover, other protocols like Uniswap (UNI), Aave (AAVE), and Morpho (MORPHO) are also mentioned for their transition to a usage-based valuation model, which could strengthen their market position.
The TradFi Element of the Bet
The second sector identified by Hougan concerns established companies investing in crypto on a large scale and not merely limited to small pilot projects. In this regard, Robinhood has been pointed out as a notable example. Indeed, Robinhood launched its own blockchain on July 1st, and this initiative has shown significant growth, placing it among the top five days in terms of volume on the DEX (decentralized exchange).
Hougan emphasizes that the level of learning a company can gain from a production blockchain, like that of Robinhood, is exponential compared to pilot projects. However, he admits that the initial activity on this new blockchain is focused more on meme coins than on tokenized stocks. Nevertheless, Hougan anticipates an increase in trading volume on stocks and an uptick in the number of users as the blockchain develops.
For more information on the adoption and impact of blockchain technologies, you can check out this article on the New York Stock Exchange and its integration of payments in stablecoins.
