Wall Street's growing interest in onchain finance may spark the next crypto bull market, focusing on revenue generation and institutional involvement.
Major cryptocurrencies are holding steady despite a dip in stock prices and rising oil costs, with Bitcoin currently priced at $65,500. This resilience comes as Senate Republicans unveil a new draft of the Clarity Act, encountering pushback from Democratic leaders.
In a significant development, SEC Commissioner Hester Peirce warns that certain decentralized finance (DeFi) vaults and onchain lending services could fall under securities regulations, highlighting a cautious stance from the commission's most crypto-friendly official.
According to Matt Hougan, Chief Investment Officer at Bitwise, Wall Street's increasing interest in onchain finance could be the catalyst for the next bull market in cryptocurrency. He believes this upcoming cycle will be distinct from previous ones, emphasizing genuine financial activities and institutional participation rather than speculative trading.
Hougan identifies two main pathways for this new market cycle. The first, labeled the "Hyperliquid Lane," consists of crypto-native platforms generating substantial revenue. For instance, Hyperliquid has amassed over $1 billion in cumulative revenue and is expected to generate around $800 million this year, with nearly all proceeds reinvested into purchasing its token, HYPE.
The second pathway, termed the "Robinhood Lane," involves established financial firms leveraging blockchain technology to create robust services, rather than merely conducting pilot projects. The Robinhood Chain, launched on July 1, has already processed over $3 billion in transactions.
Hougan notes that traditional financial institutions are now actively engaging with crypto, with firms like Citadel and Morgan Stanley entering the market, which he sees as an encouraging sign for the industry. He suggests that this shift marks a transition from the narrative of "institutions are coming" to "institutions are here," potentially driving the next bull market.
Overall, Hougan's insights underline a crucial evolution in the cryptocurrency landscape, where revenue generation and infrastructure development may pave the way for a more sustainable market cycle.
