Bitwise CIO says DeFi could lead market out of crypto winter as Strategy's Saylor predicts bitcoin recovery

Decentralized finance could help lead crypto out of its current bear market, according to Bitwise Chief Investment Officer Matt Hougan, who said recent governance changes and institutional investment signal strengthening fundamentals across the sector.

In a memo to clients late Tuesday, Hougan said crypto winter often obscures meaningful progress. "In bear markets, investors tend to ignore good news. That can create opportunities for people who are paying attention," he wrote, pointing to developments at major DeFi protocols as evidence of improving conditions.

Hougan, who outlined the optimistic case for crypto in 2026 on The Block's Crypto Beat podcast earlier this week, argued that leading DeFi platforms already operate as "serious businesses with real users." He cited Uniswap's DEX trading volume, which regularly exceeds Coinbase's centralized exchange, and DeFi lender Aave's annual revenue of more than $100 million. 

Strengthening token economics

"One of my highest-conviction beliefs is that the next crypto bull market will be focused on fundamentals. Crypto investors are tired of promises; they want to see real users, revenues, and value," Hougan said. "DeFi fits the bill."

However, DeFi tokens have historically struggled to capture that value because most were designed, due to regulatory concerns at the time, primarily as governance tools without direct economic rights, he argued, with Aave down 50% in the past year and Uniswap flat over the past five.

Hougan highlighted a recent governance proposal from Aave Labs as a potential turning point. 

The proposal would commit Aave Labs to sending all revenue from Aave-branded products to the DAO treasury, which is controlled by token holders, while transferring intellectual property rights and restructuring incentives between developers and the community.

Hougan said this shift could help resolve longstanding misalignment between protocol success and token value. "In theory, every dollar of product revenue will flow to the DAO," he wrote, allowing token holders to decide whether to fund development, buy back tokens, or build reserves.

However, it has sparked debate within the Aave community. Some prominent community members have pushed back on the proposal, calling the funding request from Aave Labs "extractive," while others have raised concerns about how revenue will be defined and governed. Hougan acknowledged that the details remain important but said the broader shift toward stronger token economics could reshape the sector. "If Aave can do it, so can other DeFi assets," he wrote.

Hougan also pointed to growing institutional participation in DeFi as further evidence of momentum, noting recent investments by BlackRock in Uniswap tokens and Apollo in Morpho, an Aave competitor.

"Improving tokenomics. Institutional investment. Strong usage," Hougan wrote. "In bear markets, you want to look for areas that show strength. It sure looks like DeFi is one of them."

'Spring is coming'

Meanwhile, in an interview with Fox Business on Tuesday, Strategy co-founder and Executive Chairman Michael Saylor agreed that the crypto market is currently experiencing a significant downturn but described the environment as less severe than previous cycles and positioned for recovery.

"We are in a crypto winter," Saylor said, adding that it is "a much milder winter" and predicting it "will be shorter than previous winters."

Saylor attributed his optimism to growing institutional and financial system support, noting that the banking sector is supporting bitcoin (BTC) more strongly today than four years ago, alongside continued capital inflows and technological progress across the digital asset ecosystem.

He echoed that outlook in a post on X, writing: "We may be in the middle of a crypto winter, but spring is coming — and bitcoin is winning."