In a memo dated August 12, Matt Hougan, Chief Investment Officer of asset management firm Bitwise, stated that most crypto tokens, except for Bitcoin, are undervalued.
Investors are not aware of the revenue that protocols are now returning to holders. The most vivid example is Hyperliquid's buyback and burn of $HYPE tokens worth $1.3 billion, he said. If this trend continues, the market "could see a doubling or even an increase in value," Hougan added.
Hougan Says Tokens Are Now Trading on Revenue
For years, a key criticism of cryptocurrencies was that networks could scale significantly, but the tokens were of little utility.
In a memo titled "The Crypto Revenue Revolution," Hougan stated, "That era is over." He believes tokens are beginning to trade on the same metric as stocks and bonds, namely revenue.
Hougan directly linked his valuation thesis to the belief that the connection between protocol revenue and token price is strengthening. Bitwise stated that the memo represents a snapshot assessment and is not an investment recommendation.
Over the past year, Hyperliquid has earned over $800 million. According to the Bitwise memo, the DEX spends about 99% of its fee revenue buying $HYPE on the open market and subsequently burning it.
Since the token's launch in November 2024, these purchases have permanently removed $1.3 billion worth of $HYPE tokens from circulation.
Hougan noted that $HYPE has risen approximately 800% since launch, while Bitcoin has lost about a third of its value. He attributes part of $HYPE's rise to buyers anticipating that growing volume would directly drive the burn.
According to data.
Uniswap and Aave Copy the Hyperliquid Model
In December 2025, Uniswap held a vote on "$UNI," which for the first time introduced protocol fees, instantly burning 100 million $UNI, or about $590 million. The protocol now generates about $100 million annually and spends all of it on token buybacks.
Aave plans to spend around $30 million annually on AAVE, which is almost one-fifth of its revenue. It implemented an automated program called Aavenomics 3.0 for this purpose.
Pump.fun, which had an annual revenue of $328 million, had spent $370 million by April 2026 on perpetual vault PUMP buybacks. Lighter, a newer platform for perpetual vault buybacks, bought back about 6% of its LIT vault, generating $67 million in revenue.
The "revenue enhancement fever" has touched base chains, said Hougan. The Solana community proposed SGP-0003 to increase fee spending volume by up to 14 times.
This year, Aptos increased its gas fee tenfold. Activity on Aptos nearly tripled, and the annual number of tokens burned rose from ~90,000 to approximately 1.9 million.
A January Cryptopolitan report found that reducing supply did not lead to reliable price increases, and that many tokens with regular buybacks still underperformed the market and failed to hold their level.
Even Hyperliquid broke its initial uptrend. Pump.fun at one point bought back over 18% of its supply while the token was near its lows.
Hougan stated that token buybacks differ from stock buybacks because there is no contractual claim to profits or assets. Governance can always rewrite or change the economic principles.
end-content
