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The next few years are bound to be “exciting” for the cryptocurrency sector, according to Bitwise investment chief Matt Hougan.
“Crypto is narrative-driven,” Hougan said on Feb. 6 on X. “Right now, people are wondering what new narratives will lead us into the next bull market. Some are even wondering if there are any new narratives. From where I sit, there are quite a few.”
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Hougan outlined nine catalysts that could drive the next cryptocurrency bull market.
Revenue
Hougan said he expects blockchains that generate revenue to garner interest and activity. Blockchains currently generate between $7 billion and $8 billion annually, Hougan said, adding that he expects this number to surge into the hundreds of billions as industry gains mainstream adoption.
‘AiFi’
AI agents will use cryptocurrency rails to transact, Hougan said. This is based on the concept of agentic commerce, a growing narrative that as AI agents become more popular, they will eventually start making purchases on behalf of humans. Cryptocurrency proponents like Hougan suggest that only blockchains and cryptocurrencies can support that activity.
Fading Fiat
“Fiat currencies are dying,” Hougan said. He said the world would replace fiat with “hard currencies,” citing Bitcoin as one such currency.
Institutional Adoption
Following the U.S. Securities and Exchange Commission’s approval of spot cryptocurrency ETFs in 2024, more institutions have entered the cryptocurrency space. Hougan suggested that the institutional adoption of cryptocurrencies and blockchain technology is only just beginning. He called it a 10-year megatrend, adding that it would bring trillions of dollars into the ecosystem.
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Regulatory Progress
The cryptocurrency industry is yet to feel the impact of regulatory clarity, Hougan said. He said cryptocurrency investment and adoption would skyrocket once stablecoin legislation enacted last year and anticipated market structure legislation kicks in.
The Stablecoin Supercycle
Stablecoin adoption has become a major cryptocurrency narrative over the past year, following the U.S.’s enactment of the GENIUS Act in July. Hougan said stablecoins will become a trillion-dollar sector and the primary rails for 21st-century payments.
Tokenization
About $20 billion in assets are tokenized, according to Hougan. However, he said this figure is likely to balloon to trillions, citing the significant size of the total addressable market and the appetite from institutions such as BlackRock (NYSE:BLK).
DeFi Resurgence
Hougan said DeFi is set to grow 100 times bigger as tokenization balloons and DeFi protocols improve their tokenomics amid regulatory clarity.
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Ethereum’s Steve Jobs Moment
Ethereum co-founder Vitalik Buterin has become more vocal about his desires for the network’s future in recent months, seemingly interested in taking a more active role in shaping it. Hougan likened the shift to Steve Jobs‘ return to Apple (NASDAQ:AAPL) in 1996. “It’s going to cook,” Hougan said.
“Not all of these will work out, and there will be lots of volatility and risk along the way,” Hougan said. “But if you zoom out beyond the current market correction, imo it looks like an exciting few years.”
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Hougan’s post comes as the cryptocurrency market has endured a painful start to the year. Bitcoin was most recently trading at $69,000, down 21% year-to-date.
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This article Nine Narratives That Could Drive The Next Crypto Bull Market, According To Bitwise Investment Chief Matt Hougan originally appeared on Benzinga.com
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