Where will the main battlefield of the next bull run be? The answer is hidden in these two types of assets.

Written by: Matt Hougan, Bitwise CIO

Translated by: Saoirse, Foresight News

The crypto market is finally showing signs of bottoming out. Since July 1, Bitcoin is up 9%, while the Nasdaq 100 has fallen 6% over the same period. Crypto ETF inflows have turned from negative to positive, and market sentiment continues to improve. While it’s still too early to say the market has fully stabilized, many encouraging signals have already led a number of people to start asking about the direction of the next move.

Last Friday, an investment adviser asked me: “If the market has already bottomed, what assets will lead the next crypto bull market?”

Usually, during a crypto winter, it’s hard to answer this question. The main storyline of a new bull market often becomes clear only after the price action has already played out.

But this time, I believe the answer is already in front of our eyes: in the next crypto bull market, the core narrative will be the convergence of on-chain finance and traditional finance.

In other words, the key focus for the market will center on stablecoins, asset tokenization, around-the-clock trading, instant settlement, and the growth of institutional-grade decentralized finance (DeFi) to a scale of tens of billions of dollars. Blockchain will upend the existing financial system, just as the internet in the early 21st century reshaped media and retail. I expect this could be the largest crypto cycle in history for two reasons: first, this rally is driven by real utility value and revenue—not just market hype; second, the market targeted by this cycle is far bigger than in prior cycles—aimed at global financial markets rather than being confined to within the crypto industry.

Some people may find these trends self-evident: asset tokenization will necessarily lead the next bull market, stablecoin supply will eventually break through the tens of billions of dollars, and Wall Street’s major institutions will eventually migrate on-chain. After all, compared with traditional finance, crypto infrastructure has many natural advantages: around-the-clock trading is far more convenient than limited trading windows; instant settlement is better than T+1 settlement; and global interoperability goes beyond geographic restrictions. More than just me shares this view—so do the U.S. Securities and Exchange Commission chair, the CEO of the world’s largest asset manager, and the CEO of the world’s largest bank.

However, even if the trend looks clear, most investors still haven’t positioned their assets for this outlook. Many people are still wondering whether the crypto industry is already “past its prime.” And within this gap in perception lies a massive investment opportunity.

So how should we position for the next bull market? You can focus on two representative players pushing industry convergence from different directions: Hyperliquid (token HYPE) and Robinhood (stock ticker HOOD).

Breaking out from crypto to the outside

Hyperliquid (HYPE) is a Layer 1 blockchain (similar to Ethereum and Solana). Its native focus is to build a crypto-asset-focused perpetual derivatives trading market. Initially, investors traded Bitcoin, Ethereum, and other crypto assets on the Hyperliquid platform to speculate.

But thanks to an excellent technical experience—easy operations, instant settlement, and around-the-clock trading—its business footprint has rapidly expanded outward. Today, nearly half of Hyperliquid’s trading volume comes from traditional assets such as oil, silver, and the S&P 500 index. The platform continues expanding into spot commodities, prediction markets, and options, while also creating competitive pressure for major trading venues including CME, Nasdaq, Intercontinental Exchange, Kalshi, and Coinbase.

Hyperliquid’s momentum is so strong that competitors feel significant pressure. Even the CME has sued the U.S. Commodity Futures Trading Commission (CFTC), attempting to prevent regulators from accepting the perpetual futures products first launched by Hyperliquid.

Even during a crypto winter, the HYPE token’s year-to-date gains still reached 146%. The growth data has real backing: Hyperliquid’s cumulative total revenue surpassed $1B in June, and it’s expected to reach $800 million for the full year. The platform will use 99% of its revenue to repurchase and burn the native token HYPE, continuously reducing circulating supply. In my view, even if HYPE’s price doubles again, its valuation remains within a reasonable range.

Cutting inward from traditional finance

Robinhood has chosen to stand on the side of traditional finance and drive this industry convergence.

Robinhood itself is a traditional securities broker, competing with firms such as Charles Schwab for retail and professional investors. For a long time, Robinhood has taken a much more open stance toward crypto assets than its peers—and it was also the first major broker to launch direct crypto-asset trading functionality.

At the same time, Robinhood fully agrees with my “industry convergence” thesis. Company CEO Vlad Tenev said asset tokenization “will ultimately reshape the entire financial system”; the crypto industry and traditional finance “have long operated as two separate systems, but they will eventually fully converge.” He predicts that the line between the two will ultimately disappear completely.

On July 1, Robinhood threw its full weight behind this trend by launching its own Layer 2 blockchain, Robinhood Chain. This public chain is open to users in 120 countries (not yet supporting the U.S.), enabling users to trade tokenized stocks 24/7 year-round. On-chain, it is also compatible with mainstream decentralized finance protocols: users can swap assets on Uniswap, borrow against collateral on Morpho, or use staked assets as margin to trade perpetual contracts on the Lighter platform. Within just two weeks of launch, the assets under custody on the Robinhood Chain network surpassed $300 million, and it processes 3.6 million transactions per day.

This is worth reading carefully: earlier this month, Robinhood launched a full suite of financial services in 120 countries relying solely on technical deployment. Users can buy and sell tokenized stocks in real time, continuously, conduct margin trading, and execute leveraged operations—and many users are already participating.

Skeptics might argue that early on-chain activity was concentrated in memecoins rather than stocks, and that is indeed true. But the trading volume for tokenized stocks already has real scale, the user base is genuinely there, and I expect both categories of trading volumes to keep growing.

One thing I’m extremely confident about: Robinhood’s major competitors are closely watching this project, and they are already thinking: should we also follow and position ourselves? Do we need to build a Schwab chain, a UBS chain, a Bank of America chain? The level of trading activity Robinhood demonstrated at launch is impossible for any institution to ignore.

Two types of investment targets that could stand out

I believe the next bull market will be large enough to lift most assets across the industry. I’m bullish long term on mainstream crypto assets such as Bitcoin, Ethereum, and Solana, as well as crypto-related publicly listed companies.

But there are two types of investment targets that will have especially outstanding upside potential.

1. The Hyperliquid track: native crypto financial applications with real revenue and a strong token-economics model

Hyperliquid’s core advantage versus other crypto applications is stable, real revenue paired with a well-designed token mechanism (99% of revenue is used to repurchase and burn HYPE). Many investors have seen crypto applications with huge user bases and trading volumes, yet token prices stay sluggish. Hyperliquid’s model aligns precisely with what these kinds of investors want.

Looking further ahead, I believe there will be many emerging crypto projects that imitate HYPE’s token mechanism, creating a new batch of token investment opportunities with potential. At the same time, I’m also watching mature projects that have already built business scale and actively bind token value and platform usage at a deep level. For example, Uniswap and Aave—both enormous platforms—are rapidly optimizing token economics; Morpho is also moving in the same direction.

2. The Robinhood track: mature traditional companies running business on top of crypto infrastructure

Industry disruption will reshape the market share landscape. The adoption of stablecoins, the tokenization of assets, and the deployment of blockchain trading infrastructure represent the biggest technological change the financial markets have seen in the past fifty years—and a major transformation is quietly underway.

To find the winners, focus on companies that have already scaled up their crypto businesses, rather than those that only remain at the proof-of-concept stage. Concept pilot projects are cheap and easy to generate news buzz, but they have difficulty accumulating effective experience. Robinhood’s industry know-how, built on running a public chain operationally across 120 countries, is far beyond what any small pilot can match.

Companies I continue to watch include Coinbase, Figure, and BlackRock. I’m also keeping an eye on Visa, Stripe, and even JPMorgan Chase. Of course, there are other participants, but the companies mentioned above have all truly thrown themselves into this transformation.

Grasp the big trend of industry convergence

There’s long been a consensus in the crypto industry: the greatest success for blockchain is “invisibility”—when blockchain is deeply embedded in the underlying infrastructure of the financial system, users can hardly even perceive that blockchain exists when they use the service.

I’ve always believed that when the next bull market arrives and traditional finance becomes inseparable from crypto, the vision above will become real. Investors should follow this trend and position themselves early.

Note: Sometimes, to judge how a company is positioning itself in the crypto space, you should look at its actual actions rather than the marketing language it uses externally.