Where is the main battlefield of the next bull market? The answer lies in these two types of assets

Original Author: Matt Hougan, Bitwise CIO

Original Compiled by: Saoirse, Foresight News

The crypto market is finally showing signs of bottoming out. Since July 1st, Bitcoin has risen 9%, while the Nasdaq 100 has fallen 6% over the same period. Crypto ETF inflows have turned positive from negative, and market sentiment is steadily recovering. Although it is still too early to declare a full market stabilization, these positive signals have led many to start asking about the future market trajectory.

Last Friday, an investment advisor asked me: "If the market has bottomed, what will lead the next crypto bull run?"

Typically, during a crypto winter, this question is difficult to answer. The narrative of a new bull market often only becomes clear after the trend has run its course.

But this time, I believe the answer is right in front of us: The core narrative of the next crypto bull run will be the convergence of on-chain finance and traditional finance.

In other words, the market's main focus will revolve around stablecoins, asset tokenization, 24/7 trading, instant settlement, and institutional-grade decentralized finance (DeFi) growing to a multi-trillion dollar scale. Blockchain will disrupt the existing financial system, much like the internet reshaped media and retail in the early 21st century. I expect this could be the largest crypto cycle ever, for two reasons: First, this cycle is driven by real application value and revenue, not just market hype; second, the market this cycle targets is far larger than previous ones – it targets the global financial market, not just the crypto industry itself.

Some might find these trends self-evident: Asset tokenization will inevitably lead the next bull market, stablecoin market caps will eventually surpass trillions of dollars, and Wall Street institutions will inevitably migrate on-chain. After all, crypto infrastructure has many inherent advantages over the traditional financial system: 24/7 trading is far more convenient than limited trading hours; instant settlement is superior to T+1 settlement; global interoperability transcends geographical boundaries. I am not alone in holding this view; the Chairman of the SEC, the CEO of the world's largest asset manager, and the CEO of the world's largest bank all agree.

However, even though the trend seems clear, the vast majority of investors have not yet positioned their assets for this prospect. Many are still wondering if the crypto industry has "run its course." And within this perception gap lies a significant investment opportunity.

So, how should we position for the new bull market? We can focus on two representative entities driving industry convergence from different directions: Hyperliquid (token: HYPE) and Robinhood (ticker: HOOD).

Breaking Out from the Crypto Industry

Hyperliquid (HYPE) is a Layer 1 blockchain (similar to Ethereum, Solana) with a native positioning to build a perpetual derivatives trading market primarily focused on crypto assets. Initially, investors speculated by trading crypto assets like Bitcoin and Ethereum on the Hyperliquid platform.

However, leveraging its excellent technical experience – ease of use, instant settlement, 24/7 trading – the platform's business scope has expanded rapidly outward. Now, nearly half of Hyperliquid's trading volume comes from traditional assets like oil, silver, and the S&P 500 index. The platform is also continuously expanding into spot commodities, prediction markets, options, competing directly with a host of trading platforms including the CME, Nasdaq, ICE, Kalshi, and Coinbase.

Hyperliquid's rapid development is putting pressure on its competitors. The CME has even sued the CFTC, attempting to hinder regulators from accepting the perpetual futures products pioneered by Hyperliquid.

Even during the crypto winter, the HYPE token has gained 146% year-to-date. This growth is backed by real data: Hyperliquid's cumulative total revenue surpassed $1 billion in June, with an estimated annual revenue of $800 million. The platform uses 99% of its revenue to repurchase its native token, HYPE, on the open market, continuously reducing the circulating supply. In my view, even if the HYPE price doubles again, the valuation would still be reasonable.

Entering from Traditional Finance

Robinhood chooses to stand on the side of traditional finance to advance this industry convergence.

Robinhood itself is a traditional securities broker, competing for retail and professional investors with firms like Charles Schwab. Historically, Robinhood has been far more open to crypto assets than its peers; it was also the first major broker to offer direct trading of cryptocurrencies.

At the same time, Robinhood fully endorses what I call the "industry convergence" thesis. Its CEO, Vlad Tenev, stated that asset tokenization "will reshape the entire financial system"; the crypto industry and traditional finance have "long existed as two separate systems, but they will inevitably fully merge." He predicts that the boundary between the two will eventually disappear completely.

On July 1st, Robinhood made a full bet on this trend by launching its own Layer 2 blockchain, Robinhood Chain. This public chain is open to users in 120 countries (currently not available in the US), allowing users to trade tokenized stocks 24/7, 365 days a year. The chain is also compatible with major DeFi protocols: users can swap assets on Uniswap, lend and borrow assets on Morpho, or stake assets as margin to trade perpetual contracts on the Lighter platform. Within just two weeks of launch, Robinhood Chain had over $300 million in assets under custody on-chain, processing 3.6 million transactions daily.

This is worth reading carefully: Earlier this month, Robinhood, through a mere technical launch, rolled out a financial service in 120 countries where users can buy, sell, margin trade, and leverage tokenized stocks in real-time, without interruption – and a significant number of users have already engaged.

Skeptics will point out that early on-chain activity was heavily concentrated in meme coins rather than stocks, and that is true. But the volume in tokenized stock trading has already reached substantial levels, the user base is real, and I expect both types of trading volume to continue growing.

One thing I am very certain of: Robinhood's major competitors are closely watching this project and starting to think: Should we follow suit? Do we need to create a Schwab Chain, a UBS Chain, or a Bank of America Chain? No institution can ignore the trading activity level Robinhood demonstrated at its launch.

Two Types of Investment Targets Set to Outperform

I believe the new bull market will be sufficiently large to lift most assets in the industry. I am long-term bullish on major crypto assets like Bitcoin, Ethereum, Solana, and publicly traded crypto-related companies.

But two types of investment targets will have particularly outstanding upside potential.

1. The Hyperliquid Track: Native Crypto Financial Applications with Real Revenue and Sound Tokenomics

Hyperliquid's core advantage over other crypto applications is its stable real revenue and sound token mechanism (99% of revenue used for buyback and burn of HYPE). Many investors have seen crypto applications with large user bases and trading volumes, yet their token prices remain persistently low. Hyperliquid's model perfectly fits the needs of such investors.

Looking ahead, I believe many new crypto projects will emulate HYPE's token mechanism, creating a wave of promising next-generation token investment opportunities. Concurrently, I am also watching mature projects that already have significant business scale and are actively working to deeply align their token value with platform usage. For example, Uniswap and Aave, both giants, are rapidly optimizing their tokenomics; Morpho is also moving in the same direction.

2. The Robinhood Track: Established Traditional Enterprises Leveraging Crypto Infrastructure

Industry disruption will reshape market share landscapes. The proliferation of stablecoins, asset tokenization, and the implementation of blockchain trading infrastructure represent the most significant technological change in financial markets in the last fifty years – a massive shift is quietly underway.

To find the winners, focus on enterprises that are already running crypto businesses at scale, not just those with proof-of-concept projects. Pilot projects are cheap and good for headlines, but they rarely generate meaningful experience. The institutional knowledge Robinhood is building from a live public chain operating across 120 countries is far beyond what any small pilot program could offer.

The companies I am consistently watching include Coinbase, Figure, BlackRock; I am also keeping an eye on Visa, Stripe, and even JPMorgan. There are other participants, but these are the ones truly and deeply engaged in this transformation.

Embracing the Grand Trend of Industry Convergence

There has long been a consensus within the crypto industry: The ultimate sign of blockchain's success will be its "invisibility" – when it is so deeply embedded in the underlying architecture of the financial system that users don't even perceive its presence when using services.

I have always believed that this vision will become a reality when the next bull market arrives and traditional finance is inextricably linked with the crypto industry. Investors should position themselves ahead of this trend.

Note: Sometimes, to judge a company's commitment to crypto, you need to watch what they do, not what they say.