Matt Hougan, CIO of Bitwise, argues that the recent surge in the cryptocurrency market has a different structure than previous bull cycles, stating that the sector has entered a “differentiated bull market” where fundamental indicators are the determining factors, rather than a market where all assets rise together.
Speaking to The Rollup, Hougan stated that he believes the cryptocurrency market bottomed out in June and that a new long-term bull market cycle has begun. According to Hougan, a significantly improved regulatory environment, supporting institutional investor entry into the sector, along with crypto projects beginning to generate real revenue, the tokenization of real-world assets, and advancements in artificial intelligence, are among the key factors simultaneously driving the sector forward.
Hougan also noted that traditional finance investors are still in the early stages of entering the crypto market. He said he expects large-scale capital inflows into crypto ETFs in the fourth quarter of the year, suggesting that wealth advisors, particularly those working at large financial institutions, could play a significant role in this new wave of capital.
Another point highlighted by the Bitwise executive is the significant widening of the performance gap between assets in the cryptocurrency market. Hougan stated that in the last 30 days, there has been approximately a 130% difference between the best and worst performing assets among the top 20 cryptocurrencies by market capitalization. According to Hougan, this indicates that the market is now pricing projects not only based on overall market momentum but also on their specific developments and fundamental indicators.
Hougan therefore believes that the current bull market will be different from the “rising waters lift all boats” mentality seen in previous periods. He stated that some projects will stand out thanks to strong fundamental indicators, while others will lag behind, and that some “zombie chains” that have long failed to generate meaningful use or economic activity could be completely eliminated from the market.
Sal Ternullo from Sovereign similarly argued that the long-awaited fundamental indicator-driven pricing in the crypto market is finally beginning to emerge. Ternullo stated that while previous cycles prioritized indicators such as technological infrastructure, user adoption, and revenue generation, the market often failed to adequately differentiate between projects. He noted that the wide performance gap currently observed points to a more rational market structure.
According to Hougan, delivering value to token holders through projects will also be a critical element in the coming period. He notes that other projects, seeing successful projects offering value to investors through buybacks, revenue sharing, or different token economy models, have begun to take similar steps, which could create a positive competitive cycle within the sector.
Hougan and Ternullo Cite NEAR as an Example
In the interview, NEAR Protocol was highlighted as one example of this transformation. Hougan and Ternullo argued that NEAR has been repriced, particularly due to its Intents infrastructure, which facilitates cross-chain transactions, revenue growth, and AI-focused products. Hougan stated that the current product-market fit supports the investment thesis, and the long-term potential on the AI side offers investors an additional growth option.
Bitwise recently launched an exchange-traded product in the US that provides direct access to NEAR. Hougan stated that the company only develops such products for crypto assets where it believes in long-term potential and a strong community, adding that they think NEAR should be included in traditional investors’ crypto portfolios.
