HYPE, HOOD, and the Next Crypto Bull Market

Crypto is finally showing signs of a bottom. Since July 1, bitcoin is up 9%, even as the Nasdaq-100 is down 6%. ETF flows are turning positive, and sentiment is improving. While it’s too soon to sound the all-clear, it’s promising enough that I’m starting to get questions about what comes next.

One advisor asked last Friday: “If the bottom is in, what will lead the next crypto bull market?”

I think the answer is clear: The convergence of onchain and traditional finance. That is, the next crypto bull market will be about stablecoins, tokenization, 24/7 trading, instant settlement, and institutional DeFi scaling to the trillions, disrupting finance the way the internet disrupted media and shopping in the early 2000s.

You might say: "Matt, that's obvious! Of course tokenization will lead the next bull market! Of course stablecoins will scale to trillions! Of course Wall Street is going to build onchain"And I'd agree! So would the chairman of the SEC, the CEO of the world’s largest asset manager, and the CEO of the world’s largest bank. After all, crypto rails have a lot of obvious advantages: 24/7 is better than 9:30 a.m. to 4 p.m.; instant settlement is better than T+1; global is better than local; and so on.

And yet, despite seeming so obvious, most investors aren’t currently positioned for this change. Most are still asking if crypto is “over.”

Within that gap lies opportunity.

So how should you start positioning for the new bull market? By looking at two entities that are leading this convergence from opposite sides: Hyperliquid (HYPE) and Robinhood (HOOD).

From Crypto In

Hyperliquid (HYPE) is a Layer 1 blockchain built to host a crypto-focused perpetual derivatives market. Investors initially used the Hyperliquid app to speculate on Bitcoin, Ethereum, and other crypto-only investments. But the technology was so slick—easy to use, instant settlement, 24/7 trading, etc.—that it quickly expanded to other markets. Today, nearly half the volume on Hyperliquid is in conventional assets like oil, silver, and the S&P 500. It’s expanding into spot commodities, prediction markets, and options.

It’s so successful that its competitors are getting anxious. CME, for instance, is suing the CFTC to slow the agency’s embrace of the perpetual futures that Hyperliquid pioneered. Nasdaq, Coinbase, ICE and others are on notice.

Despite the crypto winter, Hyperliquid’s token is up 146% this year, backed by real growth. The Hyperliquid platform is on pace to generate $800 million this year, and uses 99% of that revenue to buy back its native HYPE tokens on the open market, shrinking supply. I think the token could double in price and still be fairly valued.

From TradFi Out

Robinhood is tackling this from the TradFi side.

It’s a traditional brokerage, competing with firms like Charles Schwab for retail and professional investors. But Robinhood fully believes in the “convergence” thesis. Vlad Tenev, its CEO, says tokenization is “going to eat the entire financial ecosystem" and that crypto and finance "have been living in two separate worlds for a while but are going to fully merge." He predicts the distinction between the two will eventually “disappear.” It was among the first brokerages to offer crypto trading.

On July 1, Robinhood went all-in , launching its own Layer 2 blockchain called Robinhood Chain. The chain lets users in 120 countries (not yet the U.S.) trade tokenized stocks 24/7/365. It also integrates with standard DeFi protocols: Users can swap assets on Uniswap, borrow against them on Morpho, or margin them to trade perpetual futures on Lighter. Within two weeks, Robinhood Chain held more than $300 million in deposits and was processing 3.6m transactions per day.

It’s worth reading that again: Earlier this month, with the push of a button, Robinhood turned on a financial service in 120 countries that lets people buy, sell, margin, and leverage tokenized stocks instantly, around the clock. And people did, at scale.

Skeptics will note that much of the early action is memecoins, not stocks, which is true. But the stock volume is meaningful, the users are real, and I expect both will scale over time.

One thing I’m sure of: Every major Robinhood competitor is looking at this and asking, “Should we do this too?" Do we need Schwab Chain? UBS Chain? Bank of America Chain? With activity like Robinhood had in the first weeks, no one is just going to ignore it.

Two Types of Investments That Will Win

I suspect the coming bull market will be big enough to lift most of the sector. I’m bullish on the majors—Bitcoin, Ethereum, Solana, etc.—and on crypto equities. But there are two types of investments I think are particularly well positioned.

1. The Hyperliquid Lane: Crypto Financial Applications With Real Revenues and Good Tokenomics

What separates Hyperliquid from other crypto applications is real revenues and strong tokenomics (as mentioned, 99% of revenue goes to buying and burning HYPE). That resonates with investors who have watched crypto apps rack up users and volume while their tokens went nowhere.

Over time, I believe a new wave of crypto assets will copy HYPE’s tokenomics and introduce exciting “next-gen” token opportunities. But in the meantime, I’m drawn to existing ones with real scale that are aggressively tying token value to usage. Uniswap and Aave, for instance, both operate at massive scale and are rapidly improving their tokenomics; Morpho is eyeing the same path.

2. The Robinhood Lane: Existing Companies Building on Crypto Rails

Disruption reshuffles market share. The push toward stablecoins, tokenization, and blockchain-based rails is the biggest technological shift financial markets have seen in fifty years. Big changes are afoot.

To find winners, I look for firms experimenting with crypto at scale, not just running proofs of concept, which cost little and make headlines but don’t teach you much. Robinhood is learning 10,000x more from a live chain in 120 countries than any pilot could teach it.

Among the firms I have my eyes on are Coinbase, Figure, and BlackRock; I’d think about Visa, Stripe, and even, yes, JPMorgan, which is doing a lot despite its public posiitoning. There are others, for sure, but these are among the players with real skin in the game.

Look for the Convergence

There’s a long-held belief in crypto that its greatest success will come when it’s most hidden—when blockchain technology becomes so ingrained in the architecture of the financial system that people don’t even realize it’s there.

I’m as convinced as ever that the next bull market—when traditional finance and crypto become inextricably linked—is when that happens. Investors would do well to position themselves accordingly in the meantime.

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**Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

Trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. In addition, crypto asset markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

Crypto asset trading requires knowledge of crypto asset markets. In attempting to profit through crypto asset trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial crypto asset trading. Crypto asset trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price.

The opinions expressed represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events, or a guarantee of future results, and are subject to further discussion, completion and amendment. The information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice, or investment recommendations. You should consult your accounting, legal, tax or other advisors about the matters discussed herein.