Guest: Matt Hougan, Chief Investment Officer (CIO) of Bitwise Asset Management
Host: John Gillen, The Milk Road Show
Podcast Source: Milk Road
Original Title: Matt Hougan: Crypto Is Down 50%… Wall Street Is ALL-IN
Release Date: Recorded on August 12, 2026, uploaded on August 13
Compiled by: Shenchao TechFlow
Statement: This article is a repost. Readers can find more information through the original link. If the author has any objections to the repost format, please contact us, and we will make changes as requested by the author. Reposts are for informational sharing only and do not constitute any investment advice, nor do they represent the views or positions of Wu's comments.
Interest Statement: Matt Hougan is the Chief Investment Officer of Bitwise Asset Management. Bitwise manages over $15 billion in crypto assets, with products including BTC/ETH/SOL spot ETFs, on-chain vaults, active strategies, and more. The 5% crypto allocation discussed in the program, target price of ETH 8000, as well as specific assets such as Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, etc., all have product lines or research coverage from Bitwise. Hougan explicitly states in the program, "Bitwise business 100% YOLO is better for me," but recommends a 5% allocation. Readers must judge his views based on this position.
Key Takeaways
Matt Hougan is the Chief Investment Officer of Bitwise, former CEO of ETF.com, having sold that company three times to FactSet, Informa, and BATS Global Markets; he is a co-author of two books on ETFs and crypto assets for the CFA Institute and has been selected three times for the Barron's ETF Roundtable. In other words, he is one of those who built the entire ETF industry from scratch and is now on the side of crypto, not a KOL.
The biggest contrast in this episode is in the title: crypto has dropped 50% from its peak, but Hougan says Wall Street is actually ALL-IN. This is not a slogan. He provided specific evidence: the week the Senate delayed the vote on the CLARITY Act, BlackRock announced the launch of two tokenized funds on Ethereum and other chains. People from major wealth management platforms like Wells Fargo, UBS, and Stifel told him that they do not care about short-term prices, viewing crypto as an asset class that will take shape over the next 10 years. Morgan Stanley approved the Solana ETF while the market was down, not because of FOMO, but conversely.
The two most important judgments by Hougan are: first, BTC no longer cares about bad news; the AI bubble collapse, Saylor selling BTC, and the probability of the CLARITY Act dropping from 40% to 14%, BTC rebounded. "Those who should have sold have sold; the rest believe it will reach 1 million." Second, a 0% crypto allocation is not neutral; it is extremely bearish. Global stocks are at 110 trillion, and crypto is at 2.5 trillion, meaning a neutral weight should be about 2%. If you are at zero exposure, you are effectively making a proactive bearish judgment.
Highlights
On CLARITY Act and Regulation
"This bill will never die and may never pass. It will always exist in a 'half-dead' state." "Crypto will not wait for it. BlackRock will announce tokenized funds the week after the Senate delays the CLARITY Act vote." "Those against crypto are a dying breed. When BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered are all pushing behind it, no one can stuff this back into the bottle."
On BTC Price Behavior
"Bear markets die in apathy. You know a bear market is dead when the market no longer reacts to bad news." "Those who should have sold have sold. The remaining people believe this coin will reach 1 million. They do not care whether the AI bubble bursts or not." "BTC's consolidation is a good thing. Volatility has been compressed, and when it releases upwards, it will be quick."
On DCA vs Lump Sum Buying
"Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance that prevents you from panic selling and then chasing higher prices. But from an absolute return perspective, Jan is right; BTC may explode upward soon." "If you really believe this coin will reach 1 million, why bet that 5000? Buying at 5000 in 2018, at 3500 in 2019, and now at $63000, you all ended up doing well."
On the Consensus of Bottom in October
"I hear three or four people say October will see a bottom daily, which makes me nervous. Once consensus is formed, it often doesn’t happen like that." "The calendar is indeed a reliable indicator of BTC returns. It may fall to the 50K range. But by the end of the year, I expect higher. The upside potential is much greater than the downside risks."
On Institutional Dynamics
"Platforms like Wells Fargo, UBS, and Stifel have slowly turned their boats. They do not care about short-term prices and treat crypto as an asset class that will take shape over the next 10 years." "Morgan Stanley approved the Solana ETF not because of FOMO. On the contrary, it was approved when the market was down."
On 5% Allocation
"5% is a magic number. Below 5%, adding crypto to your portfolio significantly enhances returns, but overall portfolio volatility remains almost unchanged." "Above 5%, returns continue to increase, but volatility begins to rise sharply." "0% is not neutral; it is extremely bearish. With global stocks at 110 trillion and crypto at 2.5 trillion, neutral should be about 2%. 5% is mildly bullish; 0% is extremely bearish. If you have zero exposure, you are effectively making an active bearish judgment."
Main Text
1. The CLARITY Act Did Not Pass, but Crypto Will Not Wait
Host John Gillen: You wrote in your recent CIO memo that even if the CLARITY Act does not pass, it will not truly die, and crypto will continue. Can you elaborate?
Matt Hougan said that when he wrote that memo, everyone expected a final result around August 5 or 7, as Congress was about to recess, and everyone circled the dates months in advance. But the closer it got, the more he realized that was not how Washington operates. As expected, as the recess approached, senators began hinting at "let's talk in September" and "let's discuss this in the lame duck period." The judgment he prepared for clients was that what was originally thought to be a decisive moment ended up being a dud. Indeed, there was no vote before the August recess, and at the last minute, a senator requested a potential vote in September, pushing this issue further away.
Hougan's core judgment: This bill will never die and may never pass. It will always exist in a 'half-dead' state. He also said he might be wrong; if political pressure is applied, it might pass before the elections, but the base case is that the CLARITY Act will remain in its 'half-dead' state until the end of this year.
Another judgment is already being confirmed: Crypto does not wait for it. Wall Street will continue to push tokenization, and people will continue to push stablecoins. Hougan emphasizes that crypto will continue to build on its own.
The host added that he previously interviewed Certa Labs Chief Legal Officer Rebecca Rettig, who said, "Washington's bills will die nine times before being finally passed." Rettig had previously worked on Capitol Hill. Hougan stated that he has not completely given up hope.
2. 24/7 Stock Trading and Tokenization: BlackRock Does Not Wait for Regulation
Host: An hour ago, you tweeted that "24/7 stock trading will happen at a greater and faster rate than most expect," referring to the SEC progressing with innovation exemptions to allow tokenized stock trading, right? Why are you so optimistic?
Hougan's logic is simple: Financial institutions love making money. Stocks traded 24/7/365 will generate more income than the traditional Monday to Friday, 9:30 to 4:00 schedule. Eight billion people worldwide can buy stocks, which is far more than the several hundred million people in the U.S. So they will do it. That's why you see all these tokenization projects, and all these companies talking about it in conference calls. The limiting factor has always been regulation. If the SEC does indeed enact rules to move tokenized trading from 'here' to 'there', Wall Street will rush through that door.
Hougan highlighted a point of contrast: the tokenized market is currently ridiculously small. On-chain assets are at 300 billion, while tokenized stocks are only in the hundreds of millions. The global stock market is at 110 trillion. There is a gap of several hundred times. Hougan later mentioned that this 110 trillion figure is outdated and may reach 125 trillion after a bull market. The total global assets are at $670 trillion.
The host added a piece of evidence: During the week that the Senate delayed the CLARITY Act vote for a whole month, BlackRock instead announced the launch of two tokenized funds on Ethereum and other chains. Hougan's judgment is that this is the script of Uber and Airbnb. Consumers and companies are ahead of regulation because the demand is evident, and they feel they can operate in compliance. Regulation will ultimately catch up. BlackRock does this because they believe they can comply; they know the demand is there, they understand the world is moving towards tokenizing all assets, and they want to continue to be the largest asset manager globally in that world, just as they are in the current paper certificate world.
3. The Anti-Crypto Army is a Dying Breed
Host: The CLARITY Act battle reminds us that the anti-crypto army is not yet completely dead. Some have celebrated the failure of the CLARITY Act. Is this regulatory risk still present?
Hougan: It is always a risk. You never know if extreme political factions will regain power. But when it is not just crypto pushing this, but also BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered, it's very difficult to stuff this back in the bottle.
He acknowledges that there will be challenges in some corners; there is uncertainty regarding developer liability. But the broader trend of "moving assets onto the chain" cannot be undone by the anti-crypto army. He said these people are a dying breed.
The host mentioned a report from Standard Chartered released this week: They predict that by 2030, on-chain tokenized assets will reach 4 trillion, while also giving Chainlink a target price of 200. Hougan stated that if regulations fall into place, Standard Chartered’s numbers might still be conservative. Once these things start to snowball, they will move very quickly. The world is large. With $670 trillion in global assets, even 4% would be over 24 trillion, and currently, on-chain is less than 1%.
Hougan’s counterintuitive judgment: The tokenization of RWA is currently so small precisely because reluctant regulators have pressed it down for many years. Once that pressure is released, there will be pent-up demand that springs up.
4. BTC Consolidation is a Good Thing: Bear Markets Die in Apathy
Host: BTC has been consolidating the past few weeks; what are your thoughts?
Hougan’s unexpected response: "Bear markets die in apathy." You know a bear market is dead when the market no longer reacts to bad news.
He cited recent bad news: AI stock volatility (significant momentum compressing trades due to Situational Awareness losses), Saylor selling a large amount of BTC, the probability of the CLARITY Act dropping from 40% to 14%. BTC actually went up.
Hougan's explanation: Those who should have sold have sold. The remaining people believe this coin will reach 1 million. They do not care whether the AI bubble bursts or not. This is ultimately a good thing for BTC. Hougan feels reassured about BTC's consolidation rather than worried.
5. DCA vs Buy Now, Consensus on October Bottom
Host: I have interviewed Jan VanEck and Matthew Siegel from VanEck. Jan said, "Don't be fancy; build your position now." Matthew said, "DCA into the market now until Q4." What do you think? How does Bitwise approach this?
Hougan: Both of them are correct. Matthew is right on a behavioral level. One of the greatest risks in crypto is behavioral risk: buying in, dropping 15%, panic selling, and chasing higher prices later. DCA is behavioral insurance: this month buy 10%, if it drops next month, you are glad to buy another 10%. If you believe it will go up, DCA provides a mechanism to counter panic.
But from an absolute return perspective, Jan is correct. Hougan believes that BTC's volatility has been compressed and will release upwards quickly. If you seek absolute returns, now is the time to go all in.
The host added the consensus about the October bottom: he has heard many people say BTC will see a bottom in October, which makes him nervous because once a consensus is formed, it often doesn't happen like that. Hougan acknowledges that this consensus is strong; he hears three or four people talking about it daily, which makes him nervous as well. However, the BTC calendar return has historically been a reliable indicator, and he can't dispute that. The consensus might suggest a drop to the 50K range. However, if you believe it will reach 1 million, why bet that 5000? Buying at 5000 in 2018, at 3500 in 2019, and now at $63000, you all ended up doing well.
Hougan’s judgment: Look for higher by the end of the year. The intermediate path depends on many factors, but the upside potential is much greater than the downside risks.
6. Institutional Dynamics: Wells Fargo, UBS, Morgan Stanley are All Turning
Host: What have you been discussing with clients lately? Are they worried about the CLARITY Act, quantum risks, or Jim Cramer's selling?
Hougan mentioned he's had many discussions in the past month with people from the world's largest wealth management platforms like Wells Fargo, UBS, Stifel. The biggest surprise is: their boats have slowly turned. They do not care about short-term prices. They consider crypto as an asset class that will take shape over the next ten years. They recognize the bear market has happened and are aware; these people are smart, but they understand this is part of an asset class.
Hougan gave a specific example: Morgan Stanley approved the Solana ETF while the market was down. Not because of FOMO. On the contrary.
7. On-Chain Asset Management and ETH $8000
Host: What are your views on the on-chain vaults and asset management? Which assets will benefit the most?
Hougan stated that Bitwise's vault business has seen significant growth this year, despite the uncertainties in the crypto market. He believes on-chain asset management will be enormous; vaults are one of the primitives, but not the only one. Other methods of on-chain asset management will emerge in 3 to 6 months. Funds will flow in two directions: first, income-generating strategies (e.g., funding rate arbitrage) where on-chain assets provide unique income opportunities that off-chain assets cannot; and second, tokenized stock portfolios that are more flexible on-chain compared to traditional shells. Additionally, there are on-chain specific offerings: perps, pre-IPO stocks, etc.
The host asked about institutional interest in altcoins. Hougan mentioned two areas: First, stablecoins and tokenization themes. Institutions are seeking exposure to this theme. Circle, Securitize, Robinhood are traditional answers, but the on-chain answers are Ethereum, Solana, Chainlink, Ondo. Hougan remarked: these institutional investors haven't heard of Ondo, but they are asking what it is. Second, real income. Hyperliquid is the clearest example. But the entire crypto stack contains real income projects.
The host mentioned ETH. Hougan's bullish case for ETH: the total on-chain asset volume will increase 10 to 100 fold. ETH leads in market share in tokenization and stablecoins. The two questions for ETH are: can it continue to absorb on-chain assets? Hougan believes it can (Lindy Effect: trust, brand, time); how to convert market share into value, the community focuses on "ETH monetary asset value," which Hougan finds interesting but not fully realized yet. His target price for ETH is $8000 (Bitwise’s official forecast).
8. 5% is a Free Lunch, 0% is Actively Bearish
Host: Bitwise recommends a 5% crypto allocation. How did you arrive at this number?
Hougan: 5% is a magic number. Below 5%, adding crypto into a portfolio can significantly enhance returns, while the overall volatility of the portfolio remains almost unchanged. Stocks still drive portfolio volatility; you receive what is referred to in financial literature as a "free lunch": diversified returns and upside potential, with almost no increased risk. Above 5%, returns continue to rise, but volatility also starts to increase significantly.
The host added that other asset managers have recommended higher allocations. Hougan joked: "You being 100% YOLO is better for my business, but we are doing responsible things."
Hougan’s most counterintuitive judgment: 0% is extremely bearish. With global stocks at 110 trillion and crypto at 2.5 trillion, if you equate to neutral weight, it should be about 2%. 5% is mildly bullish, while 0% is extremely bearish. If you have zero allocation, you are actually making an active bearish judgement. You are off the market.
The host concluded: At this point, having zero exposure to crypto is a huge risk.
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