Crypto valuations may double with new revenue-sharing protocols, says Bitwise CIO

Matt Hougan, Chief Investment Officer at Bitwise, has highlighted the potential for crypto valuations to double as protocols increasingly adopt mechanisms that link their revenue directly to tokens. Hougan expects this trend to expand across decentralized finance (DeFi) applications and layer-1 blockchain networks over the coming one to two years.

This shift could significantly impact how tokens are valued, moving away from traditional metrics to models that incorporate protocol-generated revenue. Such mechanisms may include fee-sharing, staking rewards, or other revenue-sharing arrangements that align token holder interests with protocol success.

The adoption of revenue-linked valuation models could enhance investor confidence and attract more institutional participation, as it offers a clearer link between protocol performance and token value. However, the extent and speed of this adoption remain uncertain, and the impact on overall crypto valuations will depend on how broadly and effectively these mechanisms are implemented.

Hougan's outlook suggests a transformative period for the crypto ecosystem, where revenue-sharing protocols could become a standard feature, potentially leading to higher valuations and more sustainable growth models.