Bitwise CIO Matt Hougan says crypto assets are underpriced as protocols shift to revenue-driven models, with token buybacks and burns spreading across DeFi and L1s.
Bitwise CIO Matt Hougan published a note on Aug. 13 arguing that cryptocurrency token prices do not yet reflect a shift in how blockchain protocols handle the revenue they generate. He said valuations could double or more if the market adjusts to that change, though he did not give a timeline for when that might occur.
Hougan described the current period as a departure from an earlier phase in which networks produced economic activity without returning much of that value to token holders. "That era is over," he wrote. "We're now in a stage where, outside of Bitcoin, the value of crypto assets will increasingly be defined by the same metric that defines stocks and bonds: revenue."
Protocols Turning Fees Into Token Value
Hougan pointed to Hyperliquid (HYPE) as one example of the pattern. The decentralized exchange generated more than $800 million in revenue last year and directed about 99% of its fee income toward buying and burning its native token. The protocol has bought and burned $1.3 billion worth of HYPE since the token launched in November 2024, according to the note.
Other protocols cited in the note include Uniswap (UNI), which generates roughly $100 million in annual revenue, and Aave (AAVE), which is targeting about $30 million in annual token burns, equal to around 20% of its annual revenue. Pump(dot)fun (PUMP) has generated $328 million in annual revenue and burned $370 million worth of PUMP through April 2026. Lighter (LIT) has repurchased about 6% of LIT's circulating supply and generates $67 million in annual revenue.
Related Article: Bitwise Cuts 14% of Staff Amid Crypto Market Downturn
Layer-1 Networks Join the Shift
The same pattern is appearing at the layer-1 blockchain level, Hougan said. A Solana (SOL) proposal known as SGP-0003 would increase its fee burn rate by up to 14 times if approved. Aptos (APT) raised gas fees tenfold earlier this year, after which transaction activity nearly tripled and annual token burns rose from roughly 90,000 APT to about 1.9 million APT.
Hougan also noted changes in the US regulatory environment as a factor, citing the SEC's July 2023 court loss in its case against Ripple (XRP), that case’s resolution in August 2025, and the appointment of Paul Atkins as SEC chair to replace Gary Gensler. Hougan said the shift in regulatory posture reduced the legal uncertainty that had previously complicated protocols’ efforts to implement revenue-sharing structures.
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