Author: Matt Hougan, Chief Information Officer at Bitwise
Compiled by Hu Tao, ChainCatcher
Cryptocurrencies are finally showing signs of hitting a bottom. Since July 1, Bitcoin has risen 9%, while the Nasdaq 100 has declined 6%. ETF fund flows have turned positive, and market sentiment is improving. While it’s still too early to declare a full market recovery, the current signs are encouraging enough that I’ve started receiving questions about what comes next.
Last Friday, a consultant asked: “If the cryptocurrency market has already hit its bottom, what factors will trigger the next bull run?”
I believe the answer is clear: the convergence of on-chain finance with traditional finance. That is, the next crypto bull market will revolve around stablecoins, tokenization, 24/7 trading, instant settlement, and the scaling of institutional-grade decentralized finance (DeFi) to the trillions, disrupting finance just as the internet disrupted media and retail in the early 2000s.
You might say: "Matt, that's obvious! Tokenization will definitely lead the next bull market! Stablecoins will surely expand to a trillion-dollar scale! Wall Street will definitely build on-chain!"
I agree! The Chairman of the U.S. Securities and Exchange Commission (SEC), the CEO of the world’s largest asset management firm, and the CEO of the world’s largest bank would also agree. After all, the crypto ecosystem has many obvious advantages: 24/7 operation beats 9:30 AM to 4 PM; instant settlement beats T+1; global reach beats local limitations; and so on.
Yet, despite how obvious it seems, most investors are not currently positioned for this. Many are still asking whether crypto is “over.” The opportunity lies in this gap. So, how should you begin positioning for the next bull market? Focus on entities leading this convergence from two opposite directions: Hyperliquid (HYPE) and Robinhood (HOOD).
Enter through 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 exceptionally smooth—user-friendly, instant settlement, 24/7 trading, and more—leading to rapid expansion into other markets.
Today, nearly half of Hyperliquid’s trading volume comes from traditional assets such as oil, silver, and the S&P 500. It is expanding into spot commodities, prediction markets, and options. Its success has alarmed competitors. For example, CME is suing the CFTC to slow the agency’s adoption of perpetual futures pioneered by Hyperliquid. Other institutions, including Nasdaq, Coinbase, and ICE, have also taken notice.
Despite the crypto winter, Hyperliquid’s token has risen 146% this year, supported by real growth. The platform is on track to generate $800 million in revenue this year, with 99% of that allocated to repurchasing its native HYPE token on the open market, reducing supply. I believe it remains fairly valued even if the token price doubles.
Enter from the TradFi side
Robinhood advances this convergence from the traditional finance side. It is a traditional brokerage that competes with companies like Charles Schwab for retail and professional investors.
But Robinhood fully believes in the “convergence” narrative. Its CEO, Vlad Tenev, said that tokenization “will consume the entire financial ecosystem,” and that crypto and finance “have lived in two parallel worlds for some time, but are about to fully merge.” He predicts that the boundary between the two will eventually “disappear.” Robinhood was one of the first brokers to offer crypto trading.
On July 1, Robinhood launched its own Layer 2 blockchain, Robinhood Chain, enabling users in 120 countries (excluding the U.S.) to trade tokenized stocks 24/7/365. It integrates with standard DeFi protocols: users can swap assets on Uniswap, borrow and lend on Morpho, or trade perpetual futures on Lighter with margin. Within just two weeks, deposits on Robinhood Chain exceeded $300 million, with daily trading volume reaching 3.6 million transactions.
Worth reading again: Earlier this month, Robinhood enabled a financial service in 120 countries with just a single click, allowing people to buy, sell, margin trade, and leverage-tokenized stocks 24/7. And people have indeed engaged at scale. Skeptics may point out that early activity has been mostly meme coins rather than stocks—and they’re right. But stock trading volume is already meaningful, users are real, and I expect both to grow over time.
One thing I’m certain of: every major competitor of Robinhood is paying attention and asking themselves, “Should we do this too?” Do we need Schwab Chain? UBS Chain? Bank of America Chain? Given Robinhood’s performance in the first few weeks, no one will overlook it.
Two winning investment types
I believe the upcoming bull market will be large enough to lift the entire sector. I’m bullish on major cryptocurrencies—Bitcoin, Ethereum, Solana, and others—as well as crypto-related stocks. But there are two investments I think are particularly well-positioned.
1. Hyperliquid path: A crypto finance application with real revenue and sound token economics
Hyperliquid distinguishes itself from other crypto applications through its real revenue and robust tokenomics (as mentioned, 99% of revenue is used to repurchase and burn HYPE). This is particularly appealing to investors who have seen crypto applications accumulate large user bases and trading volumes, yet their 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 before that, I prefer existing projects that already have real scale and are actively tying token value to usage. For example, Uniswap and Aave are operating at large scale and rapidly improving their token economies; Morpho is also moving in the same direction.
2. Robinhood path: Existing companies building on the crypto infrastructure
Disruption will reshuffle market share. Moving toward stablecoins, tokenization, and blockchain infrastructure represents the largest technological shift in financial markets in fifty years. Major changes are underway. To find the winners, I’ll look for companies engaged in large-scale experiments with crypto, not just proof-of-concept projects (which are low-cost and make headlines but teach little).
Robinhood has learned more from real-time blockchain activity across 120 countries than from any pilot project by a factor of 10,000. The institutions I’m watching include Coinbase, Figure, and BlackRock; I also consider Visa, Stripe, and even JPMorgan—despite its public reservations, it’s actually doing a lot. There are other companies, but these are the true players making real investments. Look for the convergence points.
For a long time, the crypto industry has held a belief: its greatest success will occur when it is most “invisible”—when blockchain technology is so deeply embedded in the financial system’s architecture that people aren’t even aware of its presence. I am more convinced than ever that the next bull market will arrive when traditional finance and crypto become completely inseparable. Until then, investors are best served by positioning themselves accordingly.