Welcome to the 27th edition of Analyst of the Month.
Every month, we highlight a leading analyst who takes a long-term view with investing.
This month we highlight Ishmael Asad at Bitwise.
Ishmael Asad is a crypto research analyst at Bitwise, where he focuses on the long-term fundamentals shaping digital assets and the emerging onchain economy.
After beginning his career as Hedgeye’s first crypto analyst, Ishmael joined Bitwise through the firm’s research hiring competition, where his work on Bitcoin treasury companies earned him a spot on the team. Today, his research spans Ethereum, DeFi, stablecoins, tokenized assets, and the protocols positioned to benefit as more financial activity moves onchain.
Read on to learn more about Ishmael’s path into crypto, why he believes the market is increasingly disconnected from fundamentals, and his thesis for where things are going.
1. What is your origin story? How did you get into investing and crypto?
I was in college studying chemical engineering through the Covid pandemic, bored out of my mind. I tried my hand at day trading stocks and failed spectacularly, before eventually stumbling across the Bitcoin whitepaper. I was so compelled and inspired that I dropped everything and left school for a year to deliver Doordash full-time, so that I had money to invest entirely in crypto. After eventually returning to school and finishing with a degree in economics, I was lucky enough to land at Hedgeye as their first crypto analyst, doing what I loved and researching crypto. In search of diving deeper into the industry, I later applied to Bitwise’s first research hiring contest posted on X. My presentation on Bitcoin treasury companies won me the spot, and now here I am!
2. You helped build Hedgeye’s digital-assets research vertical before moving to Bitwise. How has your investment and research framework changed moving from a macro- and risk-management-oriented research platform to a dedicated crypto asset manager?
Moving over to the crypto asset management side has allowed my research to become a lot more long-term oriented and fundamentals-based. At Bitwise, our ultimate goal is to drive more capital into the crypto space, whether through ETFs, staking, or onchain products. As someone who believes crypto and blockchain tech are good for the world, I am deeply aligned with this. Macro and risk-management are always important factors in investing, but over the 5-10 year time horizon that most of our clients consider, long-term trends and fundamental use cases are often the strongest drivers.
3. One of the most interesting themes in Bitwise’s recent research has been the disconnect between price and fundamentals: crypto prices have struggled while measures like Ethereum activity, DeFi usage, stablecoin AUM, and tokenization have continued to grow. How do you distinguish a temporary cyclical divergence from a genuine fundamental mispricing?
Crypto is used to cyclical divergences. You could argue that in every prior bear market, prices fell behind fundamentals, as the technology has always had such immense potential. What’s most stark in today’s market is how far the prices have fallen behind fundamentals. Never in its history has crypto seen so many up-and-to-the-right charts - stablecoins, tokenized assets, perpetual futures, prediction markets, vaults - all while prices floundered. That’s what makes today’s market appear so fundamentally mispriced. In part I believe it’s because other high-growth, speculative areas have hogged investors’ attention. But when the market wakes up to crypto again, it will happen with size.
4. We’ve heard chatter of the DeFi Decade? Give us the TLDR of how this plays out and who benefits from it?
Firstly, we’re going to see stablecoins at least triple to over $1 trillion and tokenized assets 10x to a few hundred billion dollars over the next few years. As more dollars come onchain through these vectors, naturally they will seek ways to be productive. Businesses who keep stablecoin balances onchain will want to earn yield, and holders of tokenized treasuries and stocks may want to post them as collateral for borrowing. This is where DeFi has its moment. Investors seeking to lend and borrow will make their way over to Aave; allocators seeking yield might deposit to Morpho vaults; and Uniswap provides the liquidity and swap engine for all these transactions and strategies. These are just a few of the major DeFi apps well-positioned to benefit from the influx of onchain capital. They will see greater activity, generate fees, and become more valuable businesses.
The final piece to tie the DeFi Decade thesis together that makes these apps actually investable is revised tokenomics. With the regulatory environment becoming clearer, projects are less afraid of tying their tokens to their businesses. Buybacks have been the leading mechanism for this so far, enabling tokens to directly accrue value from protocol usage. Aave, Uniswap, and Hyperliquid all do buybacks, and recently Lido and Ethena have followed suit. I expect this trend to continue and bring a lot more value to DeFi.
5. At Hedgeye, you made a bullish case for Ethereum based in part on its position at the center of DeFi and stablecoins. How has your ETH thesis evolved since then? What would have to happen fundamentally for you to become materially more bullish or bearish?
By and large my thesis on ETH has remained the same and based on those factors. Ethereum still hosts more stablecoins, DeFi, and tokenized assets than any other chain. However, my thesis has drifted slightly as to why those factors make ETH valuable. Previously I’d have said that increased activity on the chain means increased demand for ETH for gas fees - and while that may be true, it isn’t enough of an answer. In fact, it’s becoming less of an answer as fees trend to zero while Ethereum scales its capacity. A core part of my thesis now is that if Ethereum becomes a leading global settlement layer for assets, there is inherent value assigned to ETH, as entities operating on the network will naturally hold it — to stake, to secure the network, and simply as a cost of participation. I am working on trying to figure out what exactly that value is.
6. Stablecoin AUM and tokenized real-world assets continue to grow even through weak crypto markets. Which real-world crypto use cases do you think have definitively crossed the line from experimentation to durable adoption, and where do you think the economics ultimately accrue?
The first real-world crypto use case that I think has crossed the chasm is stablecoins. Supply has reached around $300B and stayed there. That provers it’s a sticky product and has continued to provide real benefits. Most payment companies and financial institutions have integrated or adopted stablecoins in some way, even if only in early stages. The passing of the GENIUS act solidified their place, and as we begin to implement its rules ahead, stablecoins will multiply. The value will likely accrue primarily to the companies offering stablecoin services, and less directly, the blockchain platforms they are using.
Another crypto use case that has taken off and I think is here to stay is decentralized perpetual futures (perps). Perps have existed on centralized crypto exchanges for quite some time, but it was Hyperliquid that took them to the next level. Perpetual futures on crypto, equities, ETFs, commodities, and more, all on a permissionless platform where entities can freely come and create more new markets. As investors now flock to Hyperliquid to trade oil on weekends to price geopolitical risk and to price IPOs before they launch, it’s becoming a staple piece of financial market infrastructure. The value from this activity accrues directly to the HYPE token, with 99% of perp trading fee volume used to buy back HYPE.
7. What do you think most crypto investors are getting wrong today? Is there a commonly accepted framework, metric, or narrative that you think investors place far too much weight on?
I think most crypto investors have lost sight of the ethos that brought this space into existence. Every time a new shiny object enters the scene, all eyes go there, the whole narrative changes and the whole crowd moves. Something the industry could benefit from is a stronger anchoring to the ideologies that formed crypto. Blockchain is for fairness, equality, transparency, and sovereignty. If this space can remember that, we can actually deliver on what this was meant to be.
8. How have you been able to use Artemis in your research process? Are there particular datasets or metrics where on-chain data has materially changed your view on an asset?
Artemis’s Analyst tool has been extremely helpful for me in modeling token fundamentals. Artemis has just about every metric I can think of, from DeFi stats and revenue to buybacks and token unlock schedules. Pairing that with Analyst and its built-in modeling skill, it’s become much easier for me to conceptualize a thesis for a token with actual numbers. It’s one thing to have a broad thesis based on your outlook and backward-looking numbers, but it’s another thing to develop even just a few simple assumptions and forecasts, which really help cement that thesis. This is one area where I’ve enjoyed incorporating Artemis in my research.
9. How can people follow your research and get in contact with you?
The best way to follow my research is on X, my handle is @AsadIshmael. I post threads, snippets from my day-to-day research, and some occasional hot takes. Feel free to DM me if you want to talk crypto!