Bitwise CIO Says Token Revenue Models Could Double Crypto Valuations

Cryptocurrency valuations outside of Bitcoin could rise significantly as more protocols adopt mechanisms that link network revenue directly to their native tokens, according to Matt Hougan, Chief Investment Officer at Bitwise. In a memo published on August 12, Hougan argued that the market has not fully priced in a growing trend where decentralized finance platforms and layer-1 networks use protocol fees to buy back and burn their own tokens, creating a potential path for valuations to double or more.

Hougan's analysis centers on a shift from tokens valued primarily by speculation to those with economic models tied to real usage. He highlighted several protocols already implementing these revenue-to-token mechanisms. Hyperliquid, a decentralized exchange, reported $169 million in second-quarter revenue on August 6 and directed $141 million toward buybacks of its HYPE token. The protocol uses approximately 99% of its fee revenue for this purpose. Uniswap activated a fee mechanism in late 2025 designed to fund burns of its UNI token, and governance reports indicate about 7.5 million UNI have been burned through protocol fees since then. Aave's buyback program has acquired over...