Bitwise Chief Investment Officer Matt Hougan argues that crypto markets may be materially undervaluing the transaction growth available to blockchain networks if tokenized securities and AI-driven trading move from niche use cases into mainstream market infrastructure.
In a recent memo on what he described as three valuation errors in crypto, Hougan said transaction activity on blockchain networks could rise by 10 times as stocks and other traditional assets become tokenized. He added that a 50-fold or even 100-fold increase was conceivable if onchain markets operate continuously and automated systems begin executing more transactions for users.
His argument centers on activity rather than a near-term price forecast. Crypto applications are generally assessed according to the markets they serve today, Hougan wrote, even though platforms such as decentralized exchanges, lending protocols and blockchain data networks could eventually handle a much larger range of financial instruments.
Tokenized markets could expand the trading day
Hougan used U.S. equities to illustrate the potential change. Traditional stock exchanges generally operate between 9:30 a.m. and 4 p.m. Eastern Time on weekdays, giving the market roughly 33 regular trading hours each week. A tokenized version of the same market could trade around the clock, creating 168 available hours.
That change alone would not cause trading volumes to increase in direct proportion to market hours, Hougan cautioned. Many traders would continue to transact during established business periods, and liquidity would likely remain concentrated around major regional market sessions. Yet a 24/7 structure would allow participants to react to events outside conventional exchange hours, settle transactions continuously and trade instruments across time zones without waiting for a national market to reopen.
Tokenization could also change which assets are available on crypto-native venues. If stocks, bonds, real estate interests and other financial claims are issued or represented on blockchains, platforms initially built for crypto trading could gain access to markets many times larger than digital assets alone.
Hougan placed the global stock market at $150 trillion and the global bond market at $350 trillion, compared with roughly $2 trillion for crypto. He also noted that five listed companies individually have market capitalizations larger than the entire crypto market.
The comparison does not mean every traditional asset will migrate onchain, or that existing decentralized applications will automatically win that business. It does show why valuation frameworks based only on current crypto trading volumes may understate the addressable market for platforms that can accommodate tokenized financial products.
AI agents could add a second source of activity
The other force in Hougan’s scenario is the growth of AI systems able to execute transactions on a user’s behalf. Such systems could make recurring payments, rebalance portfolios, manage collateral, seek liquidity or execute trades according to instructions set by individuals or businesses.
Automated trading already exists in conventional markets, but blockchain settlement could allow software to combine execution, payment and transfer of ownership in a single operational environment. That structure may be especially useful for smaller, frequent transactions that would be uneconomic or administratively cumbersome in systems relying on limited market hours and multiple intermediaries.
A sharp increase in transaction counts would not necessarily produce the same increase in dollar trading volume. An AI agent could create many small transactions, while a large institution may execute relatively few high-value trades. Hougan’s case is therefore more relevant to protocols that earn revenue from activity, liquidity provision, settlement or data services than to a simple measure of aggregate market turnover.
The practical constraint is that automation requires reliable information, deep liquidity and clear rules for handling errors. AI agents trading tokenized securities would need accurate pricing, verified ownership records, compliant access controls and dependable feeds for interest rates, corporate actions and other offchain events.
Crypto platforms are positioned for a larger contest
Hougan named Uniswap as an example of a protocol whose opportunity could extend beyond crypto assets if a broad selection of securities becomes tradable onchain. The same logic, he wrote, could apply to Hyperliquid, Aave and Chainlink.
Each occupies a different layer of the market structure. Uniswap provides decentralized exchange infrastructure; Hyperliquid focuses on trading; Aave provides onchain lending markets; and Chainlink supplies oracle services that connect blockchains with external data. Tokenized assets would place pressure on all of those functions to handle more complex instruments and higher standards of reliability.
Hougan also challenged the assumption that traditional financial firms will inevitably dominate once tokenization grows. He cited stablecoins as an existing example: Tether and Circle together hold 88% of the stablecoin market, according to the figures in his memo, while PayPal accounts for 1%.
The comparison offers a limited but useful precedent. Major financial companies bring distribution, regulated brands and large customer bases, while crypto-native firms have spent years building systems around self-custody, 24-hour markets and blockchain settlement. The eventual winners may differ by product category rather than fall neatly into traditional or crypto-native camps.
Hougan pointed to Coinbase’s U.S. crypto custody business and the larger volumes in offshore perpetual futures markets relative to CME’s crypto derivatives operation as evidence that native platforms retain meaningful advantages in some parts of the market. At the same time, he cited BlackRock’s leadership in bitcoin ETFs as proof that established asset managers can lead when crypto is offered through familiar financial wrappers.
That division may become more pronounced as tokenization develops. Traditional institutions could control regulated fund products and distribution to existing clients, while blockchain-native platforms compete for transaction flow, lending, derivatives, settlement and the data infrastructure required to run always-on markets.
Explore how tokenized equities could unlock 24/7 AI-driven markets and reshape crypto’s long-term valuation potential.
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