Dialogue with Bitwise CIO Matt: A 0% Crypto Allocation Right Now Is Essentially a Deliberate Bearish Stance
- Core Viewpoint: Bitwise Chief Investment Officer Matt Hougan believes that despite the crypto market falling 50% from its highs, Wall Street institutions are actually accelerating their entry. He argues that a 5% crypto allocation is a "free lunch," while a 0% position is essentially an extremely bearish stance, as institutions view crypto as an asset class that will take shape over the next decade and are positioning themselves before regulatory clarity emerges.
- Key Elements:
- Regulation is "half-dead": The CLARITY Act is neither dead nor likely to pass, but crypto development doesn't wait for regulation—BlackRock still announced the launch of two tokenized funds during the week the Senate postponed its vote.
- Anti-crypto forces are waning: The driving force is no longer just the crypto circle; giants like BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered are following suit, making the direction difficult to reverse. Standard Chartered predicts on-chain tokenized assets will reach $4 trillion by 2030.
- BTC price action signals: Bear markets die from apathy—"everyone who wanted to sell has sold." When the market becomes insensitive to bad news (AI bubble, Saylor selling coins, declining odds for the bill), it instead builds momentum for an upward move; sideways trading compresses volatility, and an upward release will accelerate.
- Institutions' slow shift is not FOMO: Large wealth platforms like Wells Fargo, UBS, and Stifel don't care about short-term prices and view crypto as a long-term asset class; Morgan Stanley's approval of a Solana ETF during a market downturn is a prime example of anti-FOMO behavior.
- The magic allocation number: Allocating below 5% significantly boosts returns with almost no increase in portfolio volatility, while above 5% volatility spikes; with global equities at $110 trillion compared to crypto's $2.5 trillion, a 0% position is a deliberate bearish call rather than a neutral stance.
- On-chain asset management space: On-chain assets total only $300 billion (with tokenized stocks in the mere hundreds of millions), against global total assets of $670 trillion; projects with real revenue (such as Hyperliquid) and tokenization themes (Chainlink, Ondo) are areas of institutional focus, with an ETH price target of $8,000.
Compiled & Edited by: Deep Tide TechFlow
Guest: Matt Hougan, Chief Investment Officer (CIO) at 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
Air Date: Recorded August 12, 2026, uploaded August 13
Conflict of Interest Disclosure: Matt Hougan is CIO of Bitwise Asset Management. Bitwise manages over $15 billion in crypto assets, with products spanning BTC/ETH/SOL spot ETFs, on-chain vaults, and active strategies. Bitwise has product lines or research coverage for the 5% crypto allocation recommendation, the $8,000 ETH price target, Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, and other specific assets discussed in this episode. Hougan explicitly stated on the show that "100% YOLO is better for Bitwise's business," yet recommends a 5% allocation. Readers should evaluate his views with this position in mind.
Key Takeaways
Matt Hougan is the CIO of Bitwise, a former CEO of ETF.com whom he sold in three parts to FactSet, Informa, and BATS Global Markets. He is the co-author of two CFA Institute books on ETFs and crypto assets and has been selected three times for Barron's ETF Roundtable. In other words, he is one of the people who built the entire ETF industry from scratch, and now he's on the crypto side—not a KOL.
The biggest contrast in this episode is in the title: crypto is down 50% from its highs, but Hougan says Wall Street is ALL-IN instead. This isn't just rhetoric. He offers specific evidence: the week the Senate delayed the CLARITY Act vote, BlackRock instead announced the launch of two tokenized funds on Ethereum and other chains. People at the largest wealth management platforms like Wells Fargo, UBS, and Stifel told him they don't care about short-term prices, treating crypto as an asset class that will mature over the next 10 years. Morgan Stanley approved a Solana ETF while the market was falling, not because of FOMO, but quite the opposite.
Hougan's two most important judgments: First, BTC no longer reacts to bad news. The AI bubble unwinding, Saylor selling BTC, the CLARITY Act probability dropping from 40% to 14%—BTC bounced anyway. "Everyone who was going to sell has sold. Those who remain believe it will reach $1 million." Second, a 0% crypto allocation is not neutral, it's extremely bearish. Global equities are $110 trillion, crypto is 2.5 trillion, so the neutral weight should be roughly 2%. If you're at zero, you're effectively making an active bearish call.
Highlights & Notable Quotes
On the CLARITY Act and Regulation
"This bill will never die, and it may never pass either. It will live in a perpetual state of 'undead.'" "Crypto won't wait for it. BlackRock will announce tokenized funds the very week the Senate delays." "The anti-crypto crowd is a dying breed. When BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered are all pushing from behind, no one can put this genie back in the bottle."
On BTC Price Action
"Bear markets die in apathy. You know a bear market is truly dead when the market stops reacting to bad news." "Everyone who was going to sell has sold. Those who remain believe this coin will reach $1 million. They don't care whether the AI bubble pops." "BTC trading sideways is a good thing. Volatility is being compressed, and when it releases to the upside, it will be fast."
On DCA vs. Lump-Sum Buying
"Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance, preventing you from panic-selling and then chasing higher. But from an absolute return perspective, Jan is right—BTC could explode upward soon." "If you truly believe this coin will reach $1 million, why gamble over that $5,000? Buying at $5,000 in 2018, at 3,500 in 2019, or at $63,000 now—it all works out fine in the end."
On the October Bottom Consensus
"I hear three or four people a day saying we'll see the bottom in October, and that makes me nervous. Once a consensus forms, that's often not how it plays out." "The calendar has historically been a reliable indicator for BTC returns. It could drop to the 50K range. But I'm looking higher by year-end. The upside is much larger than the downside."
On Institutional Dynamics
"The ships at platforms like Wells Fargo, UBS, and Stifel have already made their turn. They don't care about short-term prices. They 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. Quite the opposite—they approved it while the market was falling."
On the 5% Allocation
"5% is a magic number. Below 5%, you get a nearly free lunch: significantly improved returns with barely any change in portfolio volatility." "Above 5%, returns keep climbing, but volatility starts rising meaningfully too." "0% is not neutral—it's extremely bearish. Global equities are $110 trillion, crypto is 2.5 trillion, so neutral should be around 2%. If you're at zero, you're making an active bearish call."
Full Transcript
I. The CLARITY Act Didn't Pass, But Crypto Won't Wait
Host John Gillen: In your recent CIO memo, you wrote that even if the CLARITY Act doesn't pass, it won't truly die, and crypto will keep moving forward. Can you elaborate?
Matt Hougan says when he wrote that memo, everyone expected a final outcome on August 5th or 7th because Congress was about to recess, and people had circled the date for months. But the closer it got, the more he realized that's not how Washington works. Sure enough, as recess approached, senators began floating "let's do it in September" or "let's do it in the lame-duck session." His prepared assessment for clients was: what was supposed to be a decisive moment turned out to be a dud. And that's exactly what happened—no vote before the August recess, and at the last minute a senator filed for a potential September vote, so the matter keeps getting pushed further down the road.
Hougan's core judgment: This bill will never die, and it may never pass either. It will live in a perpetual state of "undead." He acknowledges he could be wrong—if political pressure aligns, it could pass before the election—but his base case is that the CLARITY Act remains in "undead" limbo through the end of the year.
Another prediction is also coming true: Crypto won't wait for it. Wall Street will keep pushing tokenization, and people will keep pushing stablecoins. Hougan emphasizes that crypto will continue building on its own.
The host adds a note: he previously interviewed Rebecca Rettig, Chief Legal Officer at Certa Labs, who said "bills in Washington die nine times before they finally pass." Rettig previously worked on Capitol Hill. Hougan says he hasn't completely given up hope either.
II. 24/7 Stock Trading and Tokenization: BlackRock Isn't Waiting for Regulation
Host: You tweeted an hour ago that "24/7 stock trading will happen faster and bigger than most people expect." Is that about the SEC advancing an innovation exemption to allow tokenized stock trading? Why are you so bullish on this?
Hougan's logic is simple: Financial institutions love making money. Trading stocks 24/7/365 generates more revenue than trading from 9:30 to 4:00, five days a week. Having 8 billion people globally able to buy generates more than just a few hundred million Americans. So they will do it. That's why you see all these tokenization projects and all these companies talking about it on earnings calls. The limiting factor has always been regulation. If the SEC actually issues rules that move tokenized trading from "here" to "there," Wall Street will charge through that door.
Hougan highlights a striking contrast: the tokenization market is absurdly small right now. On-chain assets total $300 billion, and tokenized stocks are only a few hundred million. The global equity market is 110 trillion. That's a gap of several hundredfold. Hougan later notes that the $110 trillion figure is outdated—after the bull market, it might be 125 trillion. Global total assets stand at $670 trillion.
The host adds evidence: The very week the Senate delayed the CLARITY Act vote by a full month, BlackRock instead announced the launch of two tokenized funds on Ethereum and other chains. Hougan's take: this is the Uber and Airbnb playbook. Consumers and companies move ahead of regulation because the demand is obvious, and they believe they can do it compliantly. Regulation eventually catches up. BlackRock is doing this because they believe they can be compliant, they know the demand is there, they know the world is moving toward tokenizing all assets, and they want to remain the world's largest asset manager in that world, just as they are in the current paper-certificate world.
III. The Anti-Crypto Crowd Is a Dying Breed
Host: The CLARITY Act battle reminds us that the anti-crypto crowd isn't fully dead yet. Some people publicly celebrated that it didn't pass. Is this regulatory risk still alive?
Hougan: It's always a risk. You never know if an extreme political faction might regain power. But when the people pushing this aren't just crypto folks but also BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered, putting the genie back in the bottle becomes very difficult.
He acknowledges there are corners where challenges remain: developer liability has some uncertainty. But the broader direction of "moving assets on-chain" is something even the anti-crypto crowd can't reverse. He says these people are a dying breed.
The host notes that Standard Chartered released a report this week: predicting $4 trillion in on-chain tokenized assets by 2030, while also giving Chainlink a $200 price target. Hougan says if regulation arrives, Standard Chartered's numbers could even prove conservative. These things snowball very quickly once they start. The world is big. $670 trillion in global assets—4% would be over 24 trillion—and currently less than 1% is on-chain.
Hougan's most counter-intuitive take: tokenized RWA is so small right now precisely because reluctant regulators have been suppressing it for years. Once that releases, it'll be pent-up demand springing back.
IV. BTC Sideways Is a Good Sign: Bear Markets Die in Apathy
Host: BTC has been trading sideways for weeks. What's your take?
Hougan's answer is unexpected: "Bear markets die in apathy. You know a bear market is truly dead when the market stops reacting to bad news."
He lists the recent bad news: AI stock volatility (the most significant momentum-compression trade triggered by the Situational Awareness unwind), Saylor selling a large amount of BTC, and the CLARITY Act probability dropping from 40% to 14%. And BTC rose anyway.
Hougan's explanation: Everyone who was going to sell has sold. Those who remain believe this coin will reach $1 million. They don't care whether the AI bubble pops. That's ultimately good for BTC. Hougan feels reassured by BTC trading sideways, not worried.
V. DCA vs. Buy Now, and the October Bottom Consensus
Host: I've interviewed VanEck's Jan VanEck and Matthew Siegel. Jan said "Don't get fancy, just build your position now." Matthew said "DCA in from now through Q4." What's your take? What does Bitwise do?
Hougan: They're both right. Matthew is right on the behavioral level. Crypto's biggest risk is behavioral: you buy, it drops 15%, you panic-sell, then you chase at new highs. DCA is behavioral insurance: you buy 10% this month, and if it drops next month, you're actually happy to buy the next 10%. If you believe it will go up, DCA gives you a mechanism to fight panic.
But from an absolute return perspective, Jan is right. Hougan believes BTC's volatility has been compressed and the upside release will come quickly. If you're pursuing absolute returns, you should be fully positioned now.
The host brings up the October bottom consensus: he's heard many people say BTC will bottom in October, and that makes him nervous because once a consensus forms, that's often not how it plays out. Hougan admits the consensus is strong—he hears three or four people a day saying it, and it makes him nervous too. But BTC's calendar-based returns have historically been a reliable indicator, and he can't argue with that himself. The consensus is that it could fall to the 50K range. But if you believe it will reach $1 million, why gamble over that $5,000? Buying at $5,000 in 2018, at 3,500 in 2019, or at $63,000 now—it all works out fine in the end.
Hougan's judgment: he's looking higher by year-end. The intermediate path depends on many factors, but the upside is much larger than the downside.
VI. Institutional Dynamics: Wells Fargo, UBS, Morgan Stanley Are All Turning
Host: What have you been discussing with clients recently? Are they worried about the CLARITY Act, quantum risk, or Jim Cramer selling his bags?
Hougan says he's been talking extensively with people at the world's largest wealth management platforms over the past month—Wells Fargo,
