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Token Buyback Volumes Continue to Rise, But Price Lows Keep Falling

The volume of token buybacks continues to grow, but the minimum price level is constantly declining, according to an internal memo by Bitwise CIO Matt Hogan. He argues that most crypto tokens, except Bitcoin, are undervalued as investors are unaware of the revenue now being returned to holders. He highlights the example of Hyperliquid, which has bought back and burned $1.3 billion worth of its $HYPE token. Hogan posits that tokens are beginning to trade based on revenue, similar to stocks and bonds, marking the end of an era where scaling networks provided little token utility. He links token valuation to strengthening protocol revenue, noting that Hyperliquid has earned over $800 million in the past year and spends nearly all fees on $HYPE buybacks. Following this model, protocols like Uniswap and Aave have implemented fee mechanisms to buy back and burn their own tokens. The trend has also affected base chains like Solana and Aptos, which have proposed or enacted higher fee burns. However, the memo acknowledges that reducing token supply has not reliably boosted prices. A Cryptopolitan report found many tokens with regular buybacks still underperformed the market. Even Hyperliquid's upward trend broke, and Pump.fun conducted significant buybacks near token lows. Hogan cautions that token buybacks differ from stock buybacks due to the lack of contractual claims on profits or assets, as governance rules can always be rewritten.

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