Bitwise CIO: DeFi Could Be Key Force in Exiting Bear Market, Saylor Says 'Bitcoin Spring is Coming'

On February 18, Bitwise Chief Investment Officer (CIO) Matt Hougan said the decentralized finance (DeFi) sector is poised to lead the crypto market out of its current bear cycle, citing improving industry fundamentals and ongoing institutional inflows. In a client memo, Hougan noted bear markets often obscure industry progress—but multiple DeFi protocols now boast real-world scale and revenue-generating capabilities. For example, Uniswap’s decentralized trading volume frequently outpaces Coinbase’s, while lending protocol Aave has generated over $1 billion in annual revenue. He emphasized the next bull market may prioritize “real users, real revenue, and real value”—all hallmarks of DeFi. However, most DeFi tokens were historically designed as governance tools with no direct economic rights, so their prices haven’t fully reflected protocol value: Aave has dropped 50% over the past year, and Uniswap has traded relatively flat for the last five years. Hougan flagged a recent governance proposal from Aave Labs as a potential turning point. The proposal would allocate all revenue from Aave’s flagship product to a DAO treasury controlled by token holders, plus adjust incentive structures between developers and the community. If implemented, protocol revenue would be directly tied to token value—potentially reshaping the industry’s tokenomics model. Additionally, he noted institutions are accelerating DeFi positions: BlackRock has invested in Uniswap tokens, and Apollo Global Management has backed Aave competitor Morpho—signaling mainstream capital’s recognition of the sector. On the flip side, Michael Saylor told Fox Business in an interview that we’re indeed in a “crypto winter” now, but this cycle will be milder and shorter than prior ones. He highlighted stronger banking support for Bitcoin compared to four years ago, ongoing capital inflows, and advancing technical ecosystems as key drivers.