Key Takeaways
- • Matt Hougan, CIO of Bitwise, argues that crypto assets other than Bitcoin will increasingly be valued on revenue, with revenue-linked token buybacks as the central mechanism.
- • Hyperliquid generated over $800 million in revenue last year, with roughly 99% of network-fee income used to buy back and burn HYPE; cumulative repurchases total $1.3 billion since launch.
- • Uniswap's December 2025 "UNIfication" proposal passed with 99.9% support and burned 100 million UNI (about $590 million at the time), with protocol revenue of roughly $100 million annualized now directed to buybacks.
- • Hougan links the shift to the SEC's July 2023 loss in its Ripple case and the 2025 change in SEC leadership under Paul Atkins, which made yield distribution to token holders viable again.
- • Hougan sees crypto valuations potentially doubling over the next 12 to 24 months, while acknowledging that token holders have no legally enforceable claims to cash flows and that distribution rules are set by community governance.
Summary
Matt Hougan, Chief Investment Officer at Bitwise, argues in a widely circulated essay that the valuation framework for crypto projects is shifting toward revenue, with the exception of Bitcoin. He writes that the market will increasingly assess crypto assets using the same metrics applied to stocks and bonds. According to Hougan, the historic critique that crypto projects generate no revenue was valid, in part because Bitcoin, as a monetary-type asset, was never designed to produce cash flow, and because U.S. regulators between 2017 and 2025 treated yield distribution to token holders as unlawful securities offerings. As a result, most new projects issued governance tokens that confer voting rights but no claim on revenue.
Hougan identifies July 2023 as the turning point, when the SEC lost its lawsuit against Ripple over XRP sales to retail investors. Related rulings largely favored Ripple, and both parties waived their right to appeal in August 2025. Paul Atkins's succession of Gary Gensler as SEC Chairman then brought a more favorable approach to crypto, which Hougan says made token-distribution-based returns viable again.
Hyperliquid, a decentralized exchange that launched perpetual contract trading in February 2023, is presented as the benchmark case. Hougan reports that its token has risen roughly 800% since its November 2024 issuance, while Bitcoin fell about one-third over the same period. He states that about 99% of network-fee revenue is used to buy back HYPE, with cumulative repurchases and burns worth $1.3 billion.
Hougan cites several other projects following the model. Uniswap's "UNIfication" proposal, passed in December 2025, burned 100 million UNI and launched fee-sharing; an additional 7 million UNI have since been burned, and the protocol now generates roughly $100 million in annualized revenue directed to buybacks. Aave began weekly buybacks in April 2025, with about $30 million of AAVE projected to be burned annually, and plans "Aavenomics 3.0" in June 2026. Lighter, a perpetual exchange on Ethereum, has repurchased roughly 6% of its circulating supply with annualized revenue of $67 million. On layer-1 networks, the Solana community has proposed SGP-0003 to increase fee burns, and Aptos raised gas fees tenfold, according to Hougan, with on-chain transactions nearly tripling and annual burns rising from about 90,000 to 1.9 million tokens.
Hougan compares the moment to early internet platforms' move into advertising monetization. He argues that valuations remain low because outside investors are unaware of the change and because insiders have been disappointed by prior narratives. He cites Uniswap's market capitalization of $2.4 billion despite spot trading volume comparable to Coinbase, and a combined $2.4 billion market cap for Aave and Morpho. He also describes Hyperliquid's P/E ratio as ranging from 17 to 60.
Hougan acknowledges risks, noting that token holders lack legally enforceable claims to cash flows and that profit-distribution rules can change through governance. He concludes that crypto valuations could double or grow further as the market reprices over the coming period. These are the author's views and forecasts, not independently verified figures.
Hougan identifies July 2023 as the turning point, when the SEC lost its lawsuit against Ripple over XRP sales to retail investors. Related rulings largely favored Ripple, and both parties waived their right to appeal in August 2025. Paul Atkins's succession of Gary Gensler as SEC Chairman then brought a more favorable approach to crypto, which Hougan says made token-distribution-based returns viable again.
Hyperliquid, a decentralized exchange that launched perpetual contract trading in February 2023, is presented as the benchmark case. Hougan reports that its token has risen roughly 800% since its November 2024 issuance, while Bitcoin fell about one-third over the same period. He states that about 99% of network-fee revenue is used to buy back HYPE, with cumulative repurchases and burns worth $1.3 billion.
Hougan cites several other projects following the model. Uniswap's "UNIfication" proposal, passed in December 2025, burned 100 million UNI and launched fee-sharing; an additional 7 million UNI have since been burned, and the protocol now generates roughly $100 million in annualized revenue directed to buybacks. Aave began weekly buybacks in April 2025, with about $30 million of AAVE projected to be burned annually, and plans "Aavenomics 3.0" in June 2026. Lighter, a perpetual exchange on Ethereum, has repurchased roughly 6% of its circulating supply with annualized revenue of $67 million. On layer-1 networks, the Solana community has proposed SGP-0003 to increase fee burns, and Aptos raised gas fees tenfold, according to Hougan, with on-chain transactions nearly tripling and annual burns rising from about 90,000 to 1.9 million tokens.
Hougan compares the moment to early internet platforms' move into advertising monetization. He argues that valuations remain low because outside investors are unaware of the change and because insiders have been disappointed by prior narratives. He cites Uniswap's market capitalization of $2.4 billion despite spot trading volume comparable to Coinbase, and a combined $2.4 billion market cap for Aave and Morpho. He also describes Hyperliquid's P/E ratio as ranging from 17 to 60.
Hougan acknowledges risks, noting that token holders lack legally enforceable claims to cash flows and that profit-distribution rules can change through governance. He concludes that crypto valuations could double or grow further as the market reprices over the coming period. These are the author's views and forecasts, not independently verified figures.
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