The Next Crypto Bull Market Will Focus on On-Chain Finance and Integration with Traditional Finance

Original author: Matt Hougan, CIO of Bitwise

Saoirse, Foresight News

The crypto market is finally showing signs of a bottom. Since July 1, Bitcoin has risen 9%, while the Nasdaq 100 has declined 6% over the same period. Crypto ETF inflows have turned positive, and market sentiment continues to improve. Although it’s still too early to confirm a full market recovery, these positive signals are prompting many to ask what comes next.

Last Friday, an investment advisor asked me: “If the market has already hit its bottom, which assets will lead the next crypto bull market?”

Generally, this question is difficult to answer during a crypto winter. The main theme of a new bull market often only becomes clear after the rally has already played out.

But this time, I believe the answer is right before us: the core narrative of the next crypto bull market will be the convergence of on-chain finance and traditional finance.

In other words, the key focus of future markets will revolve around stablecoins, asset tokenization, 24/7 trading, instant settlement, and the growth of institutional-grade decentralized finance (DeFi) into trillions of dollars. Blockchain will disrupt the existing financial system, much as the internet reshaped media and retail in the early 21st century. I anticipate this could be the largest crypto cycle in history for two reasons: first, this rally is driven by real-world utility and revenue generation, not just market speculation; second, the markets targeted this time are far larger than in previous cycles—aiming at the global financial system rather than being confined within the crypto industry alone.

Some people find these trends self-evident: asset tokenization will inevitably drive the next bull market, stablecoin volumes will eventually surpass trillions of dollars, and Wall Street’s major institutions will inevitably migrate on-chain. After all, crypto infrastructure offers numerous inherent advantages over traditional financial systems: 24/7 trading is far more convenient than limited trading hours; instant settlement outperforms T+1 settlement; and global interoperability transcends geographic restrictions. I’m not alone in holding this view—the Chair of the U.S. Securities and Exchange Commission, the CEO of the world’s largest asset manager, and the CEO of the world’s largest bank all agree.

However, even though the trend appears clear, the vast majority of investors have not yet positioned their assets accordingly. Many are still questioning whether the crypto industry has already lost its momentum. This gap in perception holds significant investment opportunities.

So, how should we position ourselves for the next bull market? Consider two representative entities driving industry convergence from different directions: Hyperliquid (token HYPE) and Robinhood (stock HOOD).

Hyperliquid (HYPE) is a Layer 1 blockchain (similar to Ethereum or Solana), originally designed to build a perpetual derivatives trading market focused on crypto assets. Initially, investors used the Hyperliquid platform to speculate on crypto assets such as Bitcoin and Ethereum.

However, thanks to its exceptional technical experience—such as intuitive operations, instant settlement, and 24/7 trading—the platform has rapidly expanded its business reach. Today, nearly half of Hyperliquid’s trading volume comes from traditional assets like oil, silver, and the S&P 500 index. The platform continues to expand into spot commodities, prediction markets, and options, while also competing with major exchanges such as CME, Nasdaq, ICE, Kalshi, and Coinbase.

Hyperliquid is gaining rapid momentum, putting significant pressure on its competitors. CME has even sued the U.S. Commodity Futures Trading Commission (CFTC) in an attempt to block the regulator from approving the perpetual futures product pioneered by Hyperliquid.

Even amid the crypto winter, the HYPE token has achieved a 146% gain this year. This growth is supported by tangible fundamentals: Hyperliquid’s cumulative revenue surpassed $1 billion in June, with full-year revenue projected to reach $800 million. The platform allocates 99% of its revenue to repurchasing the native HYPE token on open markets, continuously reducing circulating supply. In my view, even if the HYPE price were to double again, its valuation would still remain within a reasonable range.

Robinhood has chosen to side with traditional finance, driving this industry convergence.

Robinhood is a traditional securities broker that competes with firms like Charles Schwab for retail and institutional investors. For a long time, Robinhood has taken a far more open approach to crypto assets than its peers, becoming the first major broker to offer direct cryptocurrency trading.

Robinhood also fully agrees with my perspective on "industry convergence." CEO Vlad Tenev stated that asset tokenization "will ultimately reshape the entire financial system," and that the crypto industry and traditional finance "have long existed as two separate systems, but will eventually fully merge." He predicts that, in the future, the boundaries between the two will disappear entirely.

On July 1, Robinhood fully bet on this trend by launching its proprietary Layer 2 blockchain, Robinhood Chain. This public chain is open to users in 120 countries (excluding the United States), enabling round-the-clock, 24/7 trading of tokenized stocks. The chain is compatible with leading decentralized finance protocols: users can swap assets on Uniswap, collateralize assets for loans on Morpho, stake assets as margin, or trade perpetual contracts on the Lighter platform. Within just two weeks of launch, the total value of assets托管 on Robinhood Chain exceeded $300 million, with 3.6 million daily transactions processed.

This content is worth careful consideration: At the beginning of this month, Robinhood launched a suite of financial services in 120 countries based solely on technology, enabling users to trade tokenized stocks in real time, non-stop, engage in margin trading and leverage operations—with a large number of users already participating.

Critics may point out that early on-chain trading has been concentrated heavily in memecoins rather than stocks—and this is indeed true. However, tokenized stock trading has already reached a meaningful scale, with a genuine user base, and I expect trading volumes for both categories to continue growing.

One thing I’m certain of: Robinhood’s major competitors are closely watching this initiative and beginning to ask themselves: Should we follow suit? Do we need to build a Charles Schwab chain, a UBS chain, a Bank of America chain? The trading activity demonstrated by Robinhood at launch is impossible for any institution to ignore.

I believe the upcoming bull market will be large enough to drive upward momentum across most assets in the industry. I am long-term bullish on major crypto assets such as Bitcoin, Ethereum, and Solana, as well as publicly traded companies related to crypto.

However, there are two types of investment assets with particularly strong upside potential.

1. Hyperliquid Track: A native crypto-financial application with genuine revenue and a high-quality token economic model

Hyperliquid’s core advantage over other crypto applications lies in its stable, real revenue and robust tokenomics (99% of revenue is used to repurchase and burn HYPE). Many investors have seen numerous crypto platforms with large user bases and high trading volumes yet persistent low token prices—Hyperliquid’s model directly addresses the needs of these investors.

In the long term, I believe many emerging crypto projects will emulate HYPE’s token mechanism, creating a new wave of promising token investment opportunities. At the same time, I’m also paying attention to mature projects that have already achieved significant scale and are actively tying token value deeply to platform usage—such as Uniswap and Aave, two platforms with massive scale that are rapidly optimizing their token economies; Morpho is also moving in the same direction.

2. Robinhood Track: Established traditional enterprises conducting business based on cryptocurrency infrastructure

Industry disruption will reshape the market share landscape. The adoption of stablecoins, asset tokenization, and the deployment of blockchain transaction infrastructure represent the largest technological transformation in financial markets in the past fifty years—major change is quietly underway.

To identify winners, focus on companies that have already scaled their crypto operations, rather than those still stuck in the proof-of-concept stage. Proof-of-concept projects are low-cost and easy to generate media buzz, but they struggle to build meaningful experience. Robinhood’s industry insights, grounded in its live blockchain operations across 120 countries, far surpass what any small pilot project can achieve.

The companies I consistently follow include Coinbase, Figure, and BlackRock; I also keep an eye on Visa, Stripe, and even JPMorgan. Of course, there are other participants, but these companies are genuinely deeply involved in this transformation.

For a long time, the crypto industry has held a consensus: the greatest success of blockchain is its "invisibility"—when blockchain is deeply embedded in the underlying architecture of financial systems, users can access services without even perceiving the presence of blockchain.

I firmly believe that when the next bull market arrives and traditional finance becomes inseparable from the crypto industry, the vision outlined above will become a reality. Investors should position themselves ahead of this trend.

Note: Sometimes, evaluating a company’s presence in the crypto space requires looking at its actual actions rather than its public messaging.