Organized & Compiled: Deep Tide TechFlow
Guests: Matt Hougan (Bitwise Chief Investment Officer), Ryan Rasmussen (Bitwise Research Director)
Host: The Rollup Podcast Host
Podcast Source: The Rollup
Original Title: Bitwise CIO & Research Head: Why Institutions Are Buying Ethereum Now (Majors vs Apps)
Broadcast Date: August 12, 2026
Note: The guests' institution, Bitwise, operates multiple crypto ETF products; their views have a structural long bias. This article retains their original statements and does not constitute investment advice.
Key Takeaways
At the time of recording, Bitcoin was around $65,000, having retreated more than 50% from last October's high. But the two Bitwise executives see the other side: Throughout the summer, Saylor (MicroStrategy founder) was selling, a nine-figure cold wallet was hacked, and the Clarity Bill stalled in the Senate. Bitcoin didn't drop at all. They interpret this as a bottoming characteristic—those who wanted to sell have already sold, leaving behind "ride or die" long-term holders, while the real big buyers, Wall Street wealth management platforms, have just completed a two-year education period and are about to start allocating.
The two guests offered a clear bifurcated judgment: The coming bull market will be split into two markets. Institutional capital will buy major assets like Bitcoin and Ethereum that can accommodate large capital, while on-chain native capital will bet on DeFi applications with real revenue (Hyperliquid, Uniswap, Aave, Morpho, etc.). They particularly emphasized that the biggest catalyst is not in the crypto sphere's view, but within the model portfolios of four wealth platforms—Morgan Stanley, Wells Fargo, UBS, and Bank of America Merrill Lynch—which manage a combined ~$20 trillion in assets. Allocating just 1% to 2% to crypto would mean hundreds of billions in sustained inflows. At the time of compilation (August 13), ETH is around $1,900, spot ETFs have seen five consecutive weeks of net inflows, with the most recent week seeing ~$245 million, the strongest in nearly four months; the SEC is scheduled to review the Reg Crypto proposal on August 14, the regulatory variable discussed in this episode is landing right now.
Selected Highlights
On Market Bottom
- "When the market becomes completely numb to bad news, it's often a sign of a real bottom." (Matt)
- "This pullback from the peak is 55%, not the 70% to 80% of the past. Cycles are compressing, volatility is decreasing." (Ryan)
- "Bear markets always last longer than you think, but you might wake up one day to a raging bull market." (Matt)
On Institutional Buying
- "Our typical client path is eight meetings with us before they start allocating. They might see us once a year. That's a two-year education process." (Matt)
- "The question they're asking is no longer 'Should we invest in crypto?' but 'When do we invest in crypto?'" (Ryan)
- "They look at 3 to 5 years, 10 years, not 3 to 5 days. The market has a new type of investor, and volatility naturally comes down." (Matt)
On the Bifurcated Bull Market
- "Bitcoin will look more and more like gold, Ethereum and Solana will look more and more like software company stocks. They were meant to have different drivers." (Ryan)
- "A $2.5 billion market cap Uniswap can't hold institutional money. The liquidity scale just doesn't match." (Matt)
- "DeFi will become in the next bull market what we thought it would become in 2021. The regulatory shackles are off." (Ryan)
On Regulation and Macro
- "The first draft rules for Reg Crypto are coming out soon, allowing new projects to raise capital without triggering SEC registration, then gradually moving toward decentralization. Washington is slower than crypto is used to, but this is the real deal." (Matt)
- "The U.S. government says it needs to borrow $600 billion in Q4, larger than the GFC bailout package. This long-term trend won't stop." (Ryan)
I. The Market is Numb to Bad News. This Might Be the Bottom.
Host: The market is waiting for a final summer drop, an October bottom. What do you think of this script?
Matt said he posted a Buzz Lightyear meme captioned with the collective sentiment of crypto: One more summer washout, one final drop, then bottom in October and a straight run up from there. Everyone is ready to go in at the end of October. But the market he sees looks different.
"My strongest feeling over the past two months is that the market has completely stopped reacting to bad news. Saylor sells Bitcoin, Bitcoin doesn't care. A nine-figure cold wallet hack, Bitcoin doesn't care. The Clarity Bill dies, Bitcoin still doesn't care. When the market becomes completely immune to bad news, that's often when a real bottom forms."
Ryan added: In past cycles, the biggest gains often came in the very first days after emerging from a bear market. Those trying to time the bottom perfectly missed the best days. Rather than waiting for Bitcoin in the $50,000s, accept the possibility: Most of this pullback might already be over.
II. The Four-Year Cycle is Being Compressed into a New Shape
Host: They say the four-year cycle is one year to top, one year to bottom. Is that changing now?
Ryan's observation is that the cycle's "amplitude" is compressing. This pullback from the peak was 55%; historically, 70% to 80% was common. The multiple on the last run to new highs was also far less than before. 2025 was a down year by calendar year. The old rule of "three years up, one year down" no longer fits.
The reason is simple: The buyers have changed. Four years ago, it was retail. Now, Bitwise deals daily with institutions, corporations, sovereign wealth funds, and family offices. Their holding periods are different, their decision rhythms are different, and the market is much larger and more liquid than before. The pattern remains, but its shape will inevitably change.
Matt said bear markets are always a bit longer than imagined, but "it's easy to get back to $100,000 within a few months under the right conditions." He repeatedly used one word to describe the coming bull market: slow bull. Slower, more fundamental, more institutional, grinding its way up bit by bit.
III. Why Institutional Buying is Slow: Eight Meetings, A Two-Year Education Period
Host: Are these investors mainly entering through ETFs? How have inflows been recently?
The two guests confirmed that ETFs are the main channel for institutional entry, just like they buy stocks and bonds. Crypto ETFs saw net outflows until late June, turning to relatively strong net inflows since July 1st, mainly into Bitcoin and Ethereum, with smaller flows to Solana and Hyperliquid.
Why now? Matt gave a cold, hard number: Bitwise's typical client averages eight meetings before making an allocation decision, and they might only meet once a year. That's a two-year education process. Bitcoin ETFs were approved in January 2024. By this summer, that education cycle for this group is just finishing.
"Their investment committees are thinking about how to get their ten thousand advisors below them to start allocating crypto. The answer is start with Bitcoin, then add some Ethereum, weighted by market cap. You always start with Bitcoin."
IV. Bifurcated Bull Market: Institutions Buy Majors, On-Chain Capital Buys Apps
Host: Why the bifurcation between institutional and on-chain native capital?
Two reasons. First, liquidity scale mismatch: Money from institutions like UBS, Morgan Stanley, doesn't fit into a $2.5 billion market cap Uniswap. Only a handful of the largest assets can truly absorb institutional-sized capital. Second, mental gap: Institutions don't have the crypto-native "psychological scars". Those with 0% allocation see a 55% drawdown as a gift, a better entry point, while those holding see pain.
Conversely, on-chain native capital understands things like Hyperliquid's nearly $1 billion annual revenue, Uniswap and Morpho returning revenue to token holders. Ryan said this "cash flow" narrative hasn't fully transmitted to the institutional side yet, but it will. Old crypto hands have a chance to get ahead of institutions.
Host: Is Bitcoin's "digital gold" narrative back?
Ryan thinks Bitcoin looks more and more like gold, while Ethereum, Solana, Hyperliquid look more and more like tech and software company stocks. Bitcoin's correlation with gold has noticeably increased over the past year, and institutions are pricing these two asset classes with completely different frameworks. He doesn't think one goes up when the other goes down, they'll just diverge more and more because the drivers were always different.
V. The Biggest Catalyst Isn't in Crypto: $20 Trillion is Knocking
Host: What catalysts are institutions waiting for?
Matt pointed to the place Crypto Twitter least pays attention to: Morgan Stanley, Wells Fargo, UBS, Bank of America Merrill Lynch—the four largest wealth management platforms, managing a combined ~$20 trillion in assets. Their "model portfolios," the standard allocation templates used by thousands of advisors, are being redesigned. Crypto is already in small pilots, like at Wells Fargo. If the model portfolio gives a 1% to 2% crypto allocation, that's hundreds of billions in inflows, on an annual, sustained basis for years.
Ryan added the bigger context: Ray Dalio recommends 15% allocation to Bitcoin or gold. One of America's most successful financial advisors, Ric Edelman, recommends clients allocate 20% to 40% to crypto. Even Charles Schwab is saying portfolios can have 6% crypto. Five years ago, this was unimaginable.
Matt's conclusion: Don't just watch the Fed, the Clarity Bill—variables the crypto sphere is used to watching. The most marginal buyers in the coming years are in the model portfolios of wealth platforms. Those seemingly insignificant small news items will trigger sustained, hundreds of billions in inflows over years.
VI. Macro: $600 Billion Borrowing and a Hawkish Fed
Host: Will money from AI rotate back into crypto?
Ryan said money flowed out of crypto, gold, and into AI-driven U.S. stocks over the last couple of years. Now capital is starting to come out of that crowded trade to look for new places. From his conversations with institutional clients, no one is asking "Should we invest in crypto?" anymore; they're all asking "When?"
The long-term logic hasn't changed: U.S. fiscal deficits continue to widen. The government announced it needs to borrow $600 billion in Q4, larger than the Global Financial Crisis bank bailout package, and the trend is accelerating. On the Fed side, market expectations for rate hikes have receded. The Jackson Hole speech at the end of the month will give some direction, but the market is adapting to the hawkish Fed tone, and oil price pressure is also blunting. As macro uncertainty declines, institutions gain confidence for cross-asset allocation. Crypto will be one beneficiary of capital rotation in Q4 and 2027.
VII. Lightning Round: $8,000 Ethereum, $500 HYPE
Host: Are your clients buying more Bitcoin or Ethereum now?
Matt: Still Bitcoin dominant, interest in Ethereum is rising. People are excited about stablecoins and tokenization, but the starting point is always Bitcoin.
Host: $180,000 Bitcoin by 2030?
Both call over. $8,000 Ethereum? Both also over, but Matt says "There are details worth unpacking here." $25,000-$30,000 Zcash? Both call under. Ryan's explanation: Not about being bearish on privacy coins, but the idea that all assets should go up itself isn't valid. Bitcoin is only $65,000 today. Reaching the million-dollar level by 2030 will take longer than people think.
$500 HYPE, about a 10x, corresponding to ~$600 billion valuation? Both somewhat uncomfortably called under. Ryan cautions that because of the buyback mechanism, the total market cap at that price might be much lower than imagined. Also, historically there's rotation between platform tokens; that's the biggest risk for a long-term 2030 call.
When asked who they were more bullish on, Robinhood (HOOD) or Hyperliquid (HYPE), they disagreed. Ryan is more bullish on HYPE: Smaller market cap, earlier in the cycle, will benefit from the next bull run. Matt wants both but sees HOOD as a "generational asset you can buy and hold for ten years, an amazingly well-executed company."
Host: Lighter $30 or $50?
Ryan said many internally at Bitwise are bullish on Lighter. The perpetual futures space will grow significantly in the next few years. $30 is more like a ceiling than a floor. Matt thinks predicting for such new platforms is too hard and deferred to Ryan.
