Bitwise CIO: crypto valuations could double as tokens start acting like stock

Bitwise CIO Matt Hougan argues crypto valuations could double or more as protocols increasingly tie token value to real revenue, he wrote in his weekly CIO memo, pointing to a wave of buyback-and-burn programs already running at real scale.

His core argument is a comparison to traditional markets: stocks and bonds get priced on revenue, and crypto assets are starting to follow the same logic as more protocols route fees directly back into their own tokens. Hyperliquid has generated more than $800 million in revenue over the past year and directs roughly 99% of it to buying and burning HYPE, a program Hougan compares directly to a corporate stock buyback, putting the token's price-to-earnings multiple somewhere between 17x and 60x depending on how supply is counted.

“If I'm right that the link between revenue and token value is strong and getting stronger, we could see valuations double or more as the market catches up with reality.”

— Matt Hougan, CIO, Bitwise

Uniswap offers the clearest recent example of the mechanism working at scale. The protocol generates roughly $100 million a year in revenue, all of it now directed to buybacks, and its December 2025 "UNIfication" proposal passed with 99.9% support before triggering an immediate burn of 100 million UNI, about 10% of the token's maximum supply and worth roughly $590 million at the time, with 7 million more UNI burned since. Aave runs a smaller but steadier version: weekly buybacks since April 2025, expanded under a June 2026 update called Aavenomics 3.0, have repurchased more than 1.2% of total AAVE supply using roughly 20% of the protocol's annual revenue.

Pump.fun has pushed the model furthest. The Solana-based token launchpad began buybacks within days of its July 2025 launch and had burned $370 million, or 36% of circulating PUMP supply, by April 2026, while committing half of the next year's net revenue to further buy-and-burn activity, a pace Hougan calls the most aggressive of the group. A newer entrant, the derivatives platform Lighter, generates about $67 million annually and started LIT buybacks almost immediately after launching earlier this year, already repurchasing roughly 6% of circulating supply. Hougan also flags what he calls "revenue fever" spreading to Layer 1 blockchains specifically: Solana's community has proposed SGP-0003 to cut inflation and raise fee burn up to 14x, following Aptos, which raised gas fees tenfold earlier this year to strengthen token holder economics.

• Hyperliquid: >$800M revenue over the past year, ~99% directed to HYPE buybacks, implied P/E of roughly 17x-60x
• Uniswap: ~$100M annual revenue, 100% to buybacks; burned 100M UNI (~10% of max supply, ~$590M) via December 2025's UNIfication vote
• Aave: weekly buybacks since April 2025, expanded under Aavenomics 3.0; >1.2% of AAVE supply repurchased using ~20% of annual revenue
• Pump.fun: burned $370M (36% of circulating PUMP) by April 2026; Lighter repurchased ~6% of supply on $67M annual revenue

Hougan's framing echoes an argument he's made before about crypto valuations decoupling from pure speculation. He recently argued the bear market sat closer to a bottom than most investors assumed, and the buyback trend gives that thesis a mechanical backbone: protocols like Aave, which just posted its best network growth in five years, are generating the kind of real, recurring revenue that makes a stock-style valuation comparison possible in the first place, rather than one built entirely on speculative demand for a token itself.

This article is for informational purposes only and does not constitute investment advice.