Bitwise CIO says token buybacks and burns could drive crypto values sharply higher

A forecast said that if a structure spreads in which protocol revenue is directly tied to token buybacks and burns, cryptocurrency values could rise by at least twofold.

On Aug. 13 (local time), blockchain outlet Cointelegraph reported that Bitwise chief investment officer Matt Hougan (맷 호건) said the cryptocurrency market excluding bitcoin is being reshaped around network revenue, but investors have not yet fully reflected the change.

A token buyback is a method in which a protocol uses revenue earned from fees and other sources to repurchase its own tokens in the market. The tokens bought can be held or used for other purposes, but if this leads to a permanent removal through a "burn", the number of tokens available for circulation declines. Assuming demand remains, a supply reduction can act as a factor lifting token value, similar to the effect of listed companies buying back and retiring their own shares with profits.

Hougan cited Hyperliquid, Uniswap, Aave, Pump.fun and Lyra, saying models that repurchase tokens with fees or remove them from circulation are already working. He said such revenue-capture mechanisms are expected to spread across DeFi applications and layer-1 networks over the next 12 to 24 months.