Bitwise chief investment officer Matt Hougan predicts crypto valuations, excluding Bitcoin, could at least double as protocols increasingly link revenue to their native tokens. Network activity is now directly feeding into native-token value, a shift Hougan said investors have not yet priced into asset valuations.
Valuation increases could stem from protocols using collected fees to fund token buybacks and burns, effectively reducing supply and creating demand for the asset. Hougan highlighted several protocols already implementing these mechanisms: Hyperliquid, Uniswap, Aave, Pump.fun and Lighter.
Hyperliquid, a decentralized exchange, generated over $800 million in revenue last year and allocates approximately 99 percent to HYPE token buybacks and burns. In the second quarter, the protocol reported $169 million in revenue, with $141 million directed toward buybacks.
Uniswap integrated revenue into UNI value following its UNIfaction overhaul, approved in December 2025. The mechanism activates protocol fees to fund UNI burns. Collected fees can be claimed by burning UNI, directly linking protocol activity to reductions in the token's circulating supply.
The Aave DAO purchased more than 205,000 AAVE tokens during the first 10 months of its buyback program. Founder Stani Kulechov confirmed the team was developing an automated, non-discretionary buyback mechanism. Kulechov stated that 100 percent of Aave Protocol and GHO revenue goes to the AAVE token, established through the Aave Will Win governance proposal.
Hougan anticipates these revenue-capture mechanisms will spread across decentralized finance applications and Layer 1 networks over the next 12 to 24 months, changing crypto valuations.
Stronger ties between protocol revenue and token value could provide investors with more conventional valuation metrics. However, Hougan cautioned that token holders lack the legal claims to cash flow that shareholders possess. Community-set tokenomics are subject to change through governance proposals.
Hougan attributes this shift to a more permissive regulatory environment in the United States. Projects avoided revenue-sharing features for years due to securities law concerns. This regulatory evolution has paved the way for protocols to adopt more direct value accrual mechanisms.
