Token Buybacks and Burns Could Double Crypto Valuations: Bitwise CIO

Bitwise Chief Investment Officer Matt Hougan predicts that token buybacks and burns could more than double crypto valuations. This shift towards a revenue-based model is already happening, with projects like Hyperliquid, Uniswap, Aave, Pump.fun, and Raydium using fees for token buybacks and burns.

Hougan cited examples of protocols returning revenue to their tokens. For instance, Hyperliquid allocated 99% of over $800 million in revenue last year to buybacks and burns. In the second quarter this year, it used $141 million out of $169 million for burns.

The trend is tied to changes in the US regulatory environment, which has led projects to adopt revenue-sharing features without violating securities laws. Hougan expects similar structures to spread across decentralized finance applications and Layer 1 networks over the next 12-24 months.