Why Ethereum Could Front-Run the Next Crypto Rally: The Overlooked Impact of the Fusaka Upgrade
Bitwise Chief Investment Officer Matt Hougan argues that Ethereum is positioned to lead the next leg of the crypto market recovery — and not because of hype or memes, but due to a quietly transformative upgrade that most investors are not yet pricing in.
At the center of his thesis is Ethereum’s upcoming Fusaka hard fork, scheduled for December 3, 2025, at 21:49:11 UTC, when it will activate on mainnet at block 13,164,544. According to Hougan, this upgrade could multiply Ethereum’s revenue capture by anywhere from five to ten times, fundamentally changing the network’s economic profile.
Fusaka: A Structural Shift in Ethereum’s Economics
Fusaka is not just another technical iteration; it directly targets how Ethereum interacts with its Layer 2 ecosystem. The upgrade introduces a minimum fee for recording data from Layer 2 networks (L2s) onto Ethereum’s base layer. Hougan highlights this as the cornerstone of his bullish stance: by charging L2s a baseline fee for data availability, Ethereum can significantly increase the amount of value it captures from the scaling solutions built on top of it.
In a post on X, Hougan wrote that this minimum data fee could raise Ethereum’s revenue capture by five to ten times. While Ethereum already benefits from L2 activity, the current design allows a substantial portion of economic value to be realized off-chain or on secondary layers, with only part of that funneled back to the base chain. Fusaka, in effect, hardwires a more consistent monetization mechanism for Ethereum’s role as the settlement and data availability layer.
Hougan believes that once the upgrade ships as expected in early December, the broader market will begin to reassess Ethereum’s earnings potential. In his view, investors are treating token economics as static, while in reality, Ethereum and other major networks are undergoing a rapid evolution in value capture design.
PeerDAS: Making Layer 2s Faster, Cheaper, and More Scalable
A key feature of Fusaka is Peer Data Availability Sampling, or PeerDAS. This innovation changes how Ethereum validators verify that transaction data is available. Instead of downloading entire data blobs, validators can sample small fragments of the data to confirm availability, dramatically reducing the bandwidth and computational resources required.
This seemingly technical change has major economic consequences. By making data availability more efficient, PeerDAS lowers the cost structure for rollups and other L2 solutions that rely on Ethereum for security and settlement. As data posting becomes cheaper and more scalable, rollups can operate with lower fees and higher throughput — yet still pay Ethereum for the privilege of using its secure base layer.
That improved efficiency is paired with a substantial increase in the block gas limit, which will rise from 45 million to as high as 150 million. With more gas per block, Ethereum can pack in more transactions, smart contract calls, and data-heavy operations. This creates more space for L2 data, more room for complex applications, and, ultimately, more fee-generating activity.
Taken together, PeerDAS and the expanded gas limit strengthen Ethereum’s role as infrastructure: a platform that services an entire ecosystem of L2s while capturing more of the economic value they create.
Why the Market May Be Underestimating Fusaka
Hougan calls Fusaka “an under-appreciated catalyst” for Ethereum and a key reason he thinks ETH could lead the crypto rebound. From a narrative perspective, much of the recent attention in digital assets has focused on themes like memecoins, new chains, and regulatory headlines. Deep protocol-level changes such as data availability sampling and block gas limit increases often fail to resonate with non-technical investors, at least initially.
However, these are precisely the changes that alter long-term fundamentals. If Ethereum’s revenue capture meaningfully increases while it remains the dominant smart contract platform and settlement layer, the network begins to look less like a speculative technology bet and more like a maturing, cash-generating infrastructure asset.
Hougan expects that, as the real-world effects of Fusaka become visible — lower L2 fees, higher throughput, and rising protocol revenue — market sentiment toward Ethereum will shift. In his view, the upgrade is not just about scalability; it’s about turning Ethereum into a more efficient business.
A Broader Trend: From Governance Tokens to Cash-Flow Assets
Fusaka isn’t happening in isolation. Hougan frames it as part of a broader shift across major crypto assets toward more explicit and robust value capture mechanisms.
For years, many tokens have leaned on vague “governance” narratives, offering holders the right to vote but little in the way of clear, ongoing economic benefits. That model is now being challenged. Under regulatory pressure and investor scrutiny, leading projects are rethinking how tokens should participate in the value their protocols generate.
Ethereum’s move to monetize L2 data more directly is one piece of that. But other top projects are undergoing their own transitions — and Hougan believes they point in the same direction: turning tokens into assets with recognizable, measurable cash flows or value accrual.
Uniswap’s Fee Switch: UNI as a True Economic Asset
One of the clearest examples is Uniswap. The dominant decentralized exchange is exploring a “fee switch” proposal that would fundamentally change UNI’s role.
If implemented, the change would earmark roughly 16% of Uniswap trading fees to be burned. Rather than distributing revenue to token holders directly, the burn mechanism reduces the overall UNI supply. This does not pay a yield in a traditional sense, but it can create a strong link between protocol usage and token value: higher trading volumes would translate into more UNI being permanently removed from circulation, strengthening its scarcity.
Hougan has argued that this single move could propel UNI toward becoming a top-10 token by market capitalization over time. The rationale is straightforward: once there is a direct, transparent connection between protocol fees and token economics, investors can more easily apply frameworks similar to those used in traditional finance — such as revenue, multiples, and growth expectations.
Critically, this would complete UNI’s evolution from a purely governance-centric token to an asset with tangible economic properties. That shift brings it into alignment with what Hougan describes as the new phase of digital assets: tokens that capture real, sustainable value rather than relying solely on speculative demand.
XRP’s Staking Debate: Rewriting Holder Economics
A similar reorientation is unfolding in the XRP ecosystem. While the specifics are still being debated, the community is actively exploring staking mechanisms that would allow XRP holders to participate more directly in the network’s economics.
If implemented, such mechanisms could introduce yield-like dynamics for XRP holders, changing the incentives and potentially tightening the link between network activity and token value. Hougan views these explorations as part of the same pattern: major tokens attempting to redesign their models so that long-term holders share more directly in protocol success.
Whether through burns, staking, or more sophisticated fee-sharing structures, the common thread is that passive token ownership increasingly comes with clearer economic expectations, rather than abstract governance privileges.
Regulation as a Catalyst for Better Token Design
Regulatory pressure is also playing a decisive role in this shift. Authorities in multiple jurisdictions have grown skeptical of tokens that promise ill-defined “governance rights” while functioning in practice as speculative assets. As a result, projects are moving away from ambiguous token models and toward clearer, more defensible frameworks where the economic role of the token is explicit.
Hougan suggests that this pressure is, paradoxically, healthy for the industry. It encourages teams to design tokens with genuine utility and robust value capture mechanisms, rather than relying on marketing narratives. For Ethereum, the Fusaka upgrade aligns with this movement by tying the chain’s economics more tightly to its actual usage as a data and settlement layer.
According to Hougan, by 2026 this industry-wide reorientation toward value capture will be unmistakable. He argues that the “level of value capture in digital assets is up only from here” and that many investors still treat token economics as if they were fixed, when they are, in fact, being continuously redesigned and optimized.
Why This Matters for the Next Crypto Cycle
In previous market cycles, narratives often revolved around raw growth metrics: user numbers, total value locked, or transaction counts. While those remain important, the emerging theme in the next cycle could be “real revenue and sustainable value.”
Ethereum, with Fusaka, is poised to become the settlement backbone for a growing constellation of L2s while more aggressively monetizing that role. Uniswap is building a direct bridge between trading volume and UNI scarcity. XRP is considering tools to reward holders through staking. Collectively, these changes point toward a market that increasingly favors protocols with credible, durable economic models.
If that thesis plays out, assets like ETH — which combine strong network effects, dominant market position, and improving value capture — may be first in line when capital rotates back into crypto majors.
What Investors Might Be Missing Today
Many market participants still focus primarily on price action, macro headlines, and short-term sentiment indicators. Yet the work that will define the winners of the next bull market is happening at the protocol and tokenomics level.
Hougan’s core argument is that investors are underpricing this quiet revolution. In Ethereum’s case, the Fusaka upgrade has already passed testing on the Holesky, Sepolia, and Hoodi testnets, with a firm mainnet activation date in place. The technical groundwork is largely done; what remains is for the market to understand the economic implications.
If Ethereum begins to generate significantly more revenue from L2s while maintaining or expanding its share of smart contract activity, the network could start to look more like a high-growth infrastructure provider than a speculative tech experiment. In that scenario, traditional valuation lenses — such as price-to-fees or price-to-revenue ratios — would become increasingly relevant and potentially favorable.
The Road Ahead: From Narrative Coins to Revenue Engines
Looking forward, the crypto landscape is likely to divide more clearly between tokens that capture value and those that do not. Memecoins and purely narrative-driven assets will continue to exist, but institutional and long-term capital is more likely to flow toward networks and protocols that demonstrate consistent, growing economic output.
Ethereum’s Fusaka upgrade, Uniswap’s proposed fee switch, and XRP’s staking discussions are early indicators of this realignment. They mark a transition from an era dominated by speculative stories to one in which cash flows, value accrual, and protocol profitability matter far more.
For investors willing to look past short-term volatility and focus on structural changes, Hougan’s message is straightforward: the rules of the game are changing. Ethereum, by enhancing its ability to monetize the very activity it secures and scales, may be one of the first major beneficiaries — and a leading candidate to drive the next crypto market rally.