Bitwise CIO bets next crypto cycle on Robinhood-Hyperliquid convergence, as SEC flags DeFi risk
Bitwise's Matt Hougan says TradFi-DeFi convergence, not speculation, will drive the next bull run, as SEC Commissioner warns on DeFi vaults.
Bitwise’s chief investment officer has staked the firm’s outlook for the next crypto market cycle on the convergence of Wall Street and onchain finance, singling out Hyperliquid and Robinhood as the two platforms most likely to drive fresh capital into Bitcoin and Ether. The thesis, set out by Matt Hougan in a memo published this week, lands as US securities regulators simultaneously sharpen scrutiny of the very DeFi infrastructure he is championing.
Hougan argues that the coming cycle will look markedly different from previous bull runs, being underpinned by stablecoin expansion, tokenisation, round-the-clock trading, instant settlement and institutional-grade DeFi rather than retail speculation. He described two parallel routes to that convergence: the “Hyperliquid Lane” and the “Robinhood Lane”.
Two lanes to convergence
Hyperliquid, an onchain perpetuals exchange, has built a dominant position in decentralised derivatives trading. Hougan’s interest centres on its tokenomics: the protocol channels 99% of its revenue into buybacks and burns of its native HYPE token, a structure he regards as unusually shareholder-friendly by crypto standards.
Bitwise has already backed that thesis with capital. The firm launched its Hyperliquid ETF, ticker BHYP, on 15 May, offering direct HYPE exposure alongside staking rewards of 0.34%. Multiple HYPE-linked ETFs have collectively attracted close to $150 million in assets since, according to Crypto Briefing.
On the traditional finance side, Robinhood launched its Arbitrum-based Robinhood Chain on 1 July. The public mainnet had accumulated $450 million in total value locked and processed more than 95 million transactions within three weeks, offering tokenised stocks to customers in over 120 countries. HYPE is now listed alongside Bitcoin on Robinhood’s platform, giving Hougan’s two “lanes” a direct point of contact.
Regulators sound a note of caution
The institutional enthusiasm comes against a more cautious regulatory backdrop. Decrypt reported that SEC Commissioner Hester Peirce has warned that some DeFi vaults and onchain lending arrangements may fall within the scope of US securities law, a caveat that bears directly on the kind of revenue-generating protocols Hougan is promoting.
Senate Republicans have meanwhile published a new draft of the Clarity Act, the market-structure legislation intended to delineate regulatory jurisdiction over digital assets, though Democratic leaders continue to oppose the text. The unresolved legislative fight leaves platforms such as Hyperliquid operating in a grey zone even as institutional money moves toward them.
Bitcoin traded at roughly $65,519, down 0.68%, while Ether stood near $1,925, broadly flat, as the memo circulated. Spot Bitcoin ETFs recorded a seventh consecutive day of inflows, a run that lends some support to Hougan’s argument that institutional appetite is building even as headline prices remain subdued.
For European and UK investors watching the sector through a compliance lens, the episode underscores a familiar tension: asset managers are moving quickly to capture the TradFi-DeFi convergence trade, while regulators on both sides of the Atlantic are still working out how existing securities frameworks apply to the protocols underpinning it.
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