Bitwise CIO Says Revenue-Tied Tokens Could Double Crypto Valuations

Crypto’s valuation framework may be due for an update as more networks turn protocol revenue into token buybacks and burns, a shift that Matt Hougan, Chief Investment Officer at Bitwise, argues the market has not fully priced in. In a Wednesday memo, Hougan described a growing “revenue-driven” model for crypto assets outside Bitcoin, where real usage and activity can translate into native-token value—potentially supporting much higher valuation expectations than today’s metrics imply.

Hougan went further, suggesting that if decentralized finance (DeFi) and layer-1 networks continue adopting fee-to-token mechanisms over the next 12 to 24 months, investors could begin to see token economics resemble more familiar valuation logic. The catch, he noted, is that token holders do not have the same legal rights to cash flows as traditional shareholders, and many tokenomics structures can be modified by communities.

Key takeaways

• Bitwise CIO Matt Hougan says the market is underpricing crypto assets that increasingly use protocol revenue for buybacks and burns.
• He expects more DeFi and layer-1 networks to add revenue-capture features within 12 to 24 months.
• Hyperliquid reported second-quarter revenue of $169 million and directed $141 million toward HYPE buybacks, according to the protocol.
• Uniswap’s fee “UNIfication” plan is designed to fund UNI burns through fee collection mechanisms approved for activation in late 2025.
• Aave DAO’s token repurchase program has already accumulated over 205,000 AAVE in its first 10 months, with automation plans in development.