Author: Matt Hougan, Chief Information Officer of Bitwise

Compiled by: Hu Tao, ChainCatcher

Cryptocurrency has finally shown signs of bottoming out. Since July 1, Bitcoin has risen by 9%, while the Nasdaq 100 index has dropped by 6%. ETF fund flows have turned positive, and market sentiment is improving. While it is still too early to declare a complete market recovery, the current signs are encouraging enough that I am starting to receive inquiries about the next trends.

One consultant asked last Friday: “If the cryptocurrency market has bottomed out, what factors will trigger the next bull market?”

I believe the answer is clear: the integration of on-chain finance with traditional finance. In other words, the next cryptocurrency bull market will revolve around stablecoins, tokenization, 24/7 trading, instant settlement, and the expansion of institutional-grade decentralized finance (DeFi) to a trillion-dollar scale, disrupting the financial industry just as the internet disrupted media and retail in the early 21st century.

You might say, “Matt, that's too obvious! Tokenization will certainly lead the next bull market! Stablecoins will definitely expand to a trillion-dollar scale! Wall Street will certainly build on-chain!”

I agree! The chair of the U.S. Securities and Exchange Commission (SEC), the CEO of the world’s largest asset management firm, and the CEOs of the world’s largest banks would agree too. After all, the crypto pathway has many obvious advantages: 24/7 is better than 9:30 AM to 4 PM; instant settlement is better than T+1; global is better than local; and so on.

However, despite being so obvious, most investors are not currently positioned for it. The majority are still asking whether crypto is “over.” The opportunity lies within this gap. So how should you start positioning for the new bull market? You could focus on two entities leading this integration from opposite ends: 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 use 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, and so on—so it quickly expands to 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 made competitors anxious. For example, CME is suing the CFTC to slow down the agency's acceptance of the perpetual futures pioneered by Hyperliquid. Other institutions like Nasdaq, Coinbase, and ICE have also taken notice.

Despite being in a crypto winter, Hyperliquid’s token has still risen 146% this year, supported by real growth. The platform is expected to generate $800 million in revenue this year, using 99% of that to buy back its native HYPE token on the open market, thereby reducing supply. I believe even if the token price doubled, it would still have a reasonable valuation.

Entering from the TradFi Side

Robinhood is advancing this integration from the traditional finance side. It is a traditional brokerage that competes with firms such as Charles Schwab for retail and professional investors.

But Robinhood fully believes in the “integration” narrative. Its CEO Vlad Tenev has stated that tokenization “will devour 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 that the boundaries between the two will ultimately “disappear.” Robinhood was one of the first brokers to offer crypto trading.

On July 1, Robinhood launched its own Layer 2 blockchain—Robinhood Chain—going all in. This chain allows users from 120 countries (the U.S. is not currently supported) to engage in 24/7/365 tokenized stock trading. It also integrates with standard DeFi protocols: users can swap assets on Uniswap, lend on Morpho, or trade perpetual futures with margin on Lighter. In just two weeks, deposits on Robinhood Chain surpassed $300 million, with daily trading volume reaching 3.6 million transactions.

It’s worth reading again: just earlier this month, Robinhood opened a financial service in 120 countries with the push of a button, allowing people to trade tokenized stocks instantly, with margin trading and leverage available 24/7. And indeed, people participated massively. Skeptics might point out that early activity was primarily in meme coins rather than stocks, which is true. However, the stock trading volume has been significant, the users are real, and I expect both to scale over time.

One thing I can say for sure is that every major competitor of Robinhood is watching this closely, 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 can afford to ignore it.

Two Types of Investment 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.—and crypto-related stocks. But there are two types of investments that I think are particularly well positioned.

1. Hyperliquid Path: Crypto financial applications with real revenue and strong token economics

The difference with Hyperliquid compared to other crypto applications is its real revenue and robust token economics (as mentioned, 99% of revenue is used for buybacks and burning HYPE). This is attractive to investors who see crypto applications accumulating a large number of users and trading volume, but the tokens are not reflecting this. Over time, I believe the new wave of crypto assets will replicate HYPE's token economics and present exciting “next-generation” token opportunities.

But before that, I prefer those existing projects that already have real scale and actively link token value to usage. For example, Uniswap and Aave are operating at scale and are rapidly improving their token economics; Morpho is also working towards that goal.

2. Robinhood Path: Existing companies building on the crypto pathway

Disruption will reshape market share. The push towards stablecoins, tokenization, and blockchain pathways is the biggest technological shift in financial markets in fifty years. Significant changes are happening. To find winners, I would look for companies that are experimenting with crypto at scale, rather than just doing proof of concepts (which are low-cost, headline-grabbing, but not very informative).

What Robinhood has learned in real-time on-chain from 120 countries is 10,000 times more than any pilot project. The institutions I am watching include Coinbase, Figure, and BlackRock; I would also consider Visa, Stripe, and even JPMorgan—despite its publicly reserved stance, it is actually doing a lot. There are other companies as well, but these are all serious players invested in the space. Finding the fusion points