Bitwise: Crypto Asset Value Will Depend on Project Revenue

• Crypto projects have started returning a portion of revenue to token holders through buybacks and burns.
• Hyperliquid, Uniswap, and Aave are already using protocol revenue to support their tokens, Matt Hougan said.
• Bitwise’s CIO believes the market has not yet fully priced this shift into crypto asset valuations.

Bitwise Chief Investment Officer Matt Hougan said the crypto market is moving toward a model in which asset value will increasingly depend on the revenue generated by the underlying protocols.

He said that the key challenge in valuing crypto assets used to be whether token holders actually captured economic upside from a project’s success. Now, more and more protocols are directing part of their revenue toward buying back and burning their own tokens.

Hougan cited Hyperliquid as one of the leading examples of this approach. According to his data, the protocol generated more than $800 million in revenue last year, and about 99% of that amount was used to buy back and burn HYPE. Since launch, the project has bought back and burned roughly $1.3 billion worth of tokens.

The mechanism means that as user activity grows, a portion of the fees collected by the protocol is used to reduce the supply of HYPE. In Hougan’s view, this link between protocol revenue and the token has been one of the drivers behind Hyperliquid’s success.