Crypto markets may be finding a floor, and the convergence of decentralized finance with traditional finance will be the force that drives the next bull cycle, according to Matt Hougan, CIO of Bitwise, one of the largest crypto-focused asset managers and the firm behind the Bitwise Bitcoin ETF (BITB).

Hougan points to Hyperliquid and Robinhood as the clearest signals of where the industry is headed. His assessment comes as digital assets show resilience against broader market weakness: Bitcoin has gained 9% since July 1, while the Nasdaq 100 declined 6% over the same period — a divergence that stands out because crypto and tech equities have moved in close correlation for much of the past two years. ETF flows have turned positive and sentiment is improving, though Hougan stops short of declaring an all-clear.

The divergence between crypto strength and equity weakness prompted an advisor to ask Hougan last week: if the bottom is in, what leads the next bull run?

Hougan's answer centers on a single thesis — the convergence of on-chain and traditional finance. He expects the next cycle to be defined by stablecoins, tokenization, 24/7 trading, instant settlement, and institutional DeFi scaling into the trillions. The thesis has gained regulatory traction following the passage of the GENIUS Act, signed into law in July 2025, which established the first comprehensive U.S. federal framework for payment stablecoins and gave financial institutions clearer rules for issuing and holding digital dollar tokens. Hougan likens the transformation to how the internet reshaped media and retail in the early 2000s.

The Crypto-Native Side: Hyperliquid

Hyperliquid originated as a Layer 1 blockchain designed for crypto perpetual futures trading. It has since expanded well beyond that scope, with nearly half of its current trading volume coming from conventional assets such as oil, silver, and the S&P 500.

The platform's rise has unsettled competitors. CME Group is currently suing the CFTC in an effort to slow the regulator's embrace of the perpetual futures contracts that Hyperliquid pioneered.

HYPE, the platform's native token, is up 146% year-to-date, supported by genuine revenue growth. Hyperliquid directs approximately 99% of its projected $800 million in annual revenue toward repurchasing HYPE tokens, effectively reducing circulating supply.

The TradFi Side: Robinhood

Robinhood is approaching the same convergence from the opposite direction. CEO Vlad Tenev has stated that tokenization is "going to eat the entire financial ecosystem," predicting that crypto and traditional finance will eventually merge entirely.

On July 1, Robinhood launched Robinhood Chain, a Layer 2 blockchain enabling users in 120 countries — though not yet the United States — to trade tokenized stocks around the clock. The chain integrates with Uniswap, Morpho, and Lighter. Within two weeks of launch, Robinhood Chain was processing 3.6 million transactions daily and held upwards of $300 million in deposits. Critics have noted, however, that much of the early activity involves memecoins rather than tokenized equities.

Where Hougan Sees the Winners

Hougan identifies two groups positioned to benefit from the convergence of traditional and on-chain finance.

The first comprises crypto-native protocols that generate real revenue and maintain sustainable token economics — Hyperliquid, Uniswap, Aave, and Morpho. Rather than depending solely on speculation, these platforms are building businesses with growing cash flows and increasing user adoption.

The second group consists of established financial institutions integrating blockchain infrastructure into their existing products. Hougan highlights Robinhood, Coinbase, BlackRock, Visa, Stripe, and JPMorgan as firms bringing tokenization, stablecoins, and on-chain settlement into mainstream finance. Several are already operational in the space: BlackRock's BUIDL tokenized treasury fund launched on Ethereum and has since expanded to multiple chains, while Stripe began accepting stablecoin payments in 2025 after acquiring stablecoin startup Bridge.

His broader perspective is that crypto achieves its greatest success when it becomes invisible — fully absorbed into the underlying infrastructure of global finance.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice of any kind.