Crypto Valuations Could Double as Revenue-Driven Models Take Hold

Bitwise CIO Matt Hougan believes that cryptocurrency valuations could double as revenue-driven models become more prevalent in the industry. In a recent note, Hougan argued that token prices do not yet reflect the shift towards protocols handling revenue differently.

According to Hougan, the current era is a departure from an earlier phase where networks produced economic activity without returning much value to token holders. He noted that this 'era is over' and that we are now in a stage where crypto assets will be valued based on their revenue generation, similar to stocks and bonds.

Hougan pointed out that several protocols have started generating significant revenue from fees, which they then direct towards buying and burning their native tokens. For example, Hyperliquid has generated over $800 million in revenue last year and burned $1.3 billion worth of its token HYPE since its launch in November 2024.

Other protocols like Uniswap, Aave, Pump(dot)fun, and Lighter have also started repurchasing and burning their tokens at a significant rate. Layer-1 networks are also following suit, with Solana proposing to increase its fee burn rate by up to 14 times if approved.