Author: Matt Hougan, Chief Investment Officer, Bitwise
Compiled by: Hu Tao, ChainCatcher
Cryptocurrency is finally showing signs of bottoming out. Since July 1st, Bitcoin has risen 9%, while the Nasdaq 100 index has fallen 6%. ETF flows have turned positive, and market sentiment is improving. While it's still too early to declare a full recovery, the current signs are encouraging enough that I've started receiving questions about what comes next.
An advisor asked me last Friday: "If the cryptocurrency market has bottomed, what will trigger the next bull market?"
I believe the answer is clear: the integration of on-chain finance and traditional finance. That is, the next cryptocurrency bull market will revolve around stablecoins, tokenization, 24/7 trading, instant settlement, and the scaling of institutional-grade decentralized finance (DeFi) into trillions of dollars. It will disrupt the financial industry just as the internet disrupted media and shopping in the early 2000s.
You might say, "Matt, that's obvious! Tokenization will surely lead the next bull market! Stablecoins will surely expand to a trillion-dollar scale! Wall Street will definitely build on-chain!"
I agree! The SEC Chairman, the CEO of the world's largest asset management company, and the CEO of the world's largest bank would also agree. After all, the crypto rails have many obvious advantages: 24/7 is superior to 9:30 AM to 4 PM; instant settlement is superior to T+1; global is superior to local; and so on.
However, despite seeming so obvious, most investors are not currently positioned for it. Most of them are still asking if crypto is "already over." The opportunity lies in this gap. So, how should you start positioning for the new bull market? Focus on entities leading this integration from two opposite directions: Hyperliquid (HYPE) and Robinhood (HOOD).
Entering from the Crypto Side
Hyperliquid (HYPE) is a Layer 1 blockchain built specifically for the crypto perpetual derivatives market. Investors initially used the Hyperliquid App to speculate on Bitcoin, Ethereum, and other pure crypto assets. But its technology is extremely smooth—easy to use, instant settlement, 24/7 trading, etc.—so it rapidly expanded into other markets.
Today, nearly half of the trading volume on Hyperliquid comes from traditional assets like oil, silver, and the S&P 500. It is expanding into spot commodities, prediction markets, and options. Its success has made competitors anxious. For example, CME is suing the CFTC to slow down the agency's acceptance of perpetual futures pioneered by Hyperliquid. Other institutions like Nasdaq, Coinbase, and ICE are also on alert.
Despite being in a crypto winter, Hyperliquid's token is still up 146% this year, backed by real growth. The platform is on track to generate $800 million in revenue this year and will use 99% of it to buy back its native HYPE token in the open market, reducing the supply. I believe even if the token price doubles, its valuation is still reasonable.
Entering from the TradFi Side
Robinhood, on the other hand, is advancing this integration from the traditional finance side. It is a traditional broker competing with companies like Charles Schwab for retail and professional investors.
But Robinhood fully believes in the "integration" narrative. Its CEO Vlad Tenev has said that tokenization "will eat the entire financial ecosystem," and that crypto and finance "have been living in two parallel worlds for some time, but are about to fully merge." He predicts the line between the two will eventually "disappear." Robinhood was one of the first brokers to offer crypto trading.
On July 1st, Robinhood went all-in and launched its own Layer 2 blockchain—the Robinhood Chain. This chain allows users in 120 countries (excluding the US for now) to trade tokenized stocks 24/7/365. It is also integrated with standard DeFi protocols: users can swap assets on Uniswap, lend and borrow on Morpho, or trade perpetual futures with leverage on Lighter. In just two weeks, the Robinhood Chain saw deposits exceeding $300 million and daily transaction volumes reaching 3.6 million.
It's worth reading again: Just earlier this month, Robinhood, with the push of a button, launched a financial service in 120 countries that allows people to buy, sell, margin trade, and leverage trade tokenized stocks instantly, around the clock. And people did participate on a large scale. Skeptics will point out that early activity was largely meme coins rather than stocks, which is true. But stock trading volume has been meaningful, the users are real, and I expect both to scale over time.
One thing I know for sure: Every major competitor of Robinhood is watching this and asking themselves, "Should we be doing this too?" Do we need a Schwab Chain? A UBS Chain? A Bank of America Chain? Given Robinhood's performance in the first few weeks, no one can ignore it.
Two Types of Investments That Will Win
I believe the upcoming bull market will be large enough to lift the entire sector. I am bullish on major coins—Bitcoin, Ethereum, Solana, etc.—as well as crypto-related stocks. But there are two types of investments I think are particularly well positioned.
1. The Hyperliquid Path: Crypto Financial Apps with Real Revenue and Sound Tokenomics
What sets Hyperliquid apart from other crypto applications is its real revenue and strong tokenomics (as mentioned, 99% of revenue is used to buy back and burn HYPE). This is attractive to investors who have seen crypto apps accumulate large user bases and trading volumes but whose tokens remain stagnant. Over time, I believe a new wave of crypto assets will replicate HYPE's tokenomics, bringing exciting "next-generation" token opportunities.
But until then, I favor existing projects that already have real scale and are actively linking token value to usage. For example, Uniswap and Aave operate at scale and are rapidly improving their tokenomics; Morpho is also moving in the same direction.
2. The Robinhood Path: Existing Companies Building on Crypto Rails
Disruption reshuffles market share. The shift towards stablecoins, tokenization, and blockchain rails is the biggest technological change in financial markets in fifty years. Significant change is happening. To find winners, I would look for companies experimenting with crypto at scale, not just with proof-of-concepts (which are low-cost and generate headlines but teach little).
Robinhood will learn 10,000 times more from its real-time, on-chain experience in 120 countries than from any pilot project. The institutions I'm watching include Coinbase, Figure, and BlackRock; I'd also consider Visa, Stripe, and even JPMorgan Chase—despite its public reservations, it actually does a lot. There are other companies, but these are the players truly committed. Find the convergence points.
