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
Recording Date: Recorded on August 12, 2026, Uploaded on August 13
Compiled by: Deep Tide TechFlow
Disclaimer: This article is a reprinted content. Readers can obtain more information through the original link. If the author has any objection to the form of reprinting, please contact us, and we will make modifications as required by the author. This reprint is for informational sharing only and does not constitute any investment advice, nor does it represent the views or positions of WuShuo.
Interest Statement: Matt Hougan is the Chief Investment Officer of Bitwise Asset Management. Bitwise manages over $15 billion in crypto assets, with products covering BTC/ETH/SOL spot ETFs, on-chain vaults, active strategies, etc. The specific assets discussed in the episode, such as the 5% crypto allocation recommendation, ETH's $8000 target price, Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, etc., are all covered by Bitwise's product lines or research. Hougan explicitly stated in the episode, "It's better for my business if you 100% YOLO," but recommended a 5% allocation. Readers must evaluate his views with this position in mind.
Key Points Summary
Matt Hougan is the Chief Investment Officer of Bitwise, former CEO of ETF.com, who sold that company in three parts to FactSet, Informa, and BATS Global Markets; he is a co-author of two monographs by the CFA Institute 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 is now on the side of crypto, 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. This is not just a slogan. He provides concrete evidence: the week the Senate postponed the CLARITY Act vote, BlackRock announced the launch of two tokenized funds on Ethereum and other chains. People from the largest wealth management platforms like Wells Fargo, UBS, and Stifel told him they don't care about short-term price movements and view crypto as an asset class that will form over the next decade. Morgan Stanley approved a Solana ETF during a market downturn, not out of FOMO, but precisely the opposite.
Hougan's two most important judgments: First, BTC has become indifferent to bad news. Despite the AI bubble burst, Saylor selling BTC, and the probability of the CLARITY Act dropping from 40% to 14%, BTC rebounded. "Everyone who wanted to sell has sold. The remaining holders believe it will reach $1 million." Second, a 0% crypto allocation is not neutral; it is extremely bearish. Global stocks are $110 trillion, crypto is $2.5 trillion. A neutral weight should be about 2%. If you have zero allocation, you are effectively making an active bearish judgment.
Highlighted Viewpoints Summary
On the CLARITY Act and Regulation
"This bill will never die, and it may never pass. It will live forever in a kind of 'zombie' state." "Crypto won't wait for it. BlackRock announced tokenized funds the very week the Senate postponed the vote." "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 wanted to sell has sold. The remaining holders believe this coin will reach $1 million. They don't care if the AI bubble bursts." "BTC trading sideways is a good thing. Volatility is being suppressed, and it will release upwards quickly."
On DCA vs. Lump Sum Investing
"Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance, preventing you from panic selling and then FOMO-ing back in. But from an absolute return perspective, Jan is right; BTC could break out upwards very quickly." "If you truly believe this coin will reach $1 million, why gamble over a few thousand dollars? Buying at $5,000 in 2018, $3,500 in 2019, and $63,000 now, all would have worked out fine in the end."
On the Consensus of an October Bottom
"I hear three or four people a day saying the bottom will be in October, and that makes me nervous. Once a consensus forms, it often doesn't happen that way." "The calendar has indeed been a reliable indicator for BTC returns historically. It could drop to the $50K range. But by year-end, I'm bullish for higher. The upside potential is much larger than the downside risk."
On Institutional Dynamics
"The ship has slowly turned for platforms like Wells Fargo, UBS, and Stifel. They don't care about short-term prices; they view crypto as an asset class that will form over the next decade." "Morgan Stanley approved the Solana ETF not because of FOMO. On the contrary, they approved it when the market was falling."
On the 5% Allocation
"5% is a magic number. Below 5%, you get an almost free lunch: returns are significantly improved, and portfolio volatility barely changes." "Above 5%, returns continue to rise, but volatility also begins to increase substantially." "0% is not neutral; it is extremely bearish. Global stocks are $110 trillion, crypto is $2.5 trillion. A neutral weight should be about 2%. Having zero allocation means you are making an active bearish judgment."
Main Text
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 continue to move forward. Can you elaborate?
Matt Hougan said when he wrote that memo, everyone expected a final result on August 5th or 7th because Congress was going on recess, and people had circled that date for months. But the closer he got, the more he realized that's not how Washington works. Sure enough, as the recess approached, Senators started floating ideas like "we'll talk in September" or "in the lame-duck session." The judgment he prepared for his clients was: what was thought to be a decisive moment turned into a dud. Indeed, there was no vote before the August recess; at the last moment, a Senator requested a potential vote in September, so the issue continues to drip into the future.
Hougan's core judgment: This bill will never die, and it may never pass. It will live forever in a kind of 'zombie' state. He also said he could be wrong; if political pressure mounts, it might pass before the election, but his base case is that the CLARITY Act remains in a 'zombie' state until the end of this year.
Another judgment is also materializing: Crypto won't 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: He previously interviewed Rebecca Rettig, Chief Legal Officer of Certa Labs, who said, "A bill in Washington dies nine times before it's finally passed." Rettig previously worked on Capitol Hill. Hougan said he hasn't completely given up hope yet.
II. 24/7 Stock Trading & Tokenization: BlackRock Isn't Waiting for Regulation
Host: You tweeted an hour ago that '24/7 stock trading will happen bigger and faster than most people expect.' Are you referring to the SEC moving forward with an innovation exemption allowing tokenized stock trading? Why are you so bullish?
Hougan's logic is simple: Financial institutions love making money. Trading stocks 24/7/365 makes more money than trading from 9:30 to 4:00, five days a week. Having 8 billion people globally able to buy makes more money than having a few hundred million in the US. So they'll do it. That's why you see all these tokenization projects, all these companies talking about it on earnings calls. The limiting factor has always been regulation. If the SEC actually issues rules moving tokenized trading from "here" to "there," Wall Street will rush through that door.
Hougan mentions a point of contrast: The tokenization market is ridiculously small right now. On-chain assets are $300 billion, tokenized stocks are just a few billion. The global stock market is $110 trillion. That's a difference of hundreds of times. Hougan later adds that the $110 trillion figure is outdated; it might be $125 trillion after the bull market. Global total assets are $670 trillion.
The host adds another piece of evidence: The very week the Senate postponed the CLARITY Act vote for a whole month, BlackRock announced the launch of two tokenized funds on Ethereum and other chains. Hougan's judgment is: This is the Uber, Airbnb playbook. Consumers and companies move ahead of regulation because the demand is obvious, and they think they can do it compliantly. Regulation eventually catches up. BlackRock is doing this because they think they can be compliant, they know the demand is there, they know the world is moving towards 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-based world.
III. The Anti-Crypto Army is a Dying Breed
Host: The fight over the CLARITY Act reminds us that the anti-crypto army isn't completely dead yet. Some publicly celebrated the CLARITY Act not passing. Is this regulatory risk still present?
Hougan: It's always a risk. You never know if extreme political factions will regain power. But when the push isn't just from crypto, but also from BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered, it becomes very difficult to put this genie back in the bottle.
He acknowledges there will be challenges in some areas: developer liability remains uncertain. But the broad direction of "moving assets on-chain," the anti-crypto army can't peel back. He says these people are a dying breed.
The host adds a report from Standard Chartered this week: predicting $4 trillion in on-chain tokenized assets by 2030, along with a $200 target price for Chainlink. Hougan says if regulation aligns, Standard Chartered's numbers might even be conservative. Once these things snowball, they happen very fast. The world is big. $670 trillion in global assets, 4% is over $24 trillion, currently less than 1% is on-chain.
Hougan's most counterintuitive judgment: The reason tokenized RWAs are so small now is precisely because reluctant regulators have suppressed it for years. Once released, it's pent-up demand snapping back.
IV. BTC Trading Sideways is a Good Thing: Bear Markets Die in Apathy
Host: What's your take on BTC trading sideways these past few weeks?
Hougan's answer is surprising: "Bear markets die in apathy. You know a bear market is truly dead when the market stops reacting to bad news."
He lists recent bad news: AI stock volatility (most notably the momentum compression trade triggered by Situational Awareness's unwinding), 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: Everyone who wanted to sell has sold. The remaining holders believe this coin will reach $1 million. They don't care if the AI bubble bursts. This is ultimately a good thing for BTC. Hougan is comforted, not worried, by BTC trading sideways.
V. DCA vs. Buy Now, The Consensus of an October Bottom
Host: I interviewed Jan VanEck and Matthew Siegel from VanEck. Jan said, 'Don't get fancy, build your position now.' Matthew said, 'DCA into the market from now until Q4.' What do you think? What does Bitwise do?
Hougan: They're both right. Matthew is right on a behavioral level. One of crypto's biggest risks is behavioral risk: buying, seeing a 15% drop, panicking and selling, then FOMO-ing back in at new highs. DCA is behavioral insurance: you buy 10% this month, if it drops next month, you're 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 volatility is being suppressed and will release upwards quickly. If you're after absolute returns, you should be fully invested now.
The host adds the October bottom consensus: He hears many people say BTC will bottom in October, which makes him nervous because once a consensus forms, it often doesn't happen that way. Hougan acknowledges the consensus is strong; he hears three or four people a day say it, which also makes him nervous. But BTC's calendar-based returns have historically been a reliable indicator, and he can't argue with that himself. The consensus is it could drop to the $50K range. But if you believe it will reach $1 million, why gamble over a few thousand dollars? Buying at $5,000 in 2018, $3,500 in 2019, and $63,000 now, all would have worked out fine in the end.
Hougan's judgment: Bullish by year-end. The path in between depends on many factors, but the upside potential is much larger than the downside risk.
VI. Institutional Dynamics: Wells Fargo, UBS, Morgan Stanley Are All Turning
Host: What are you talking about with clients lately? Are they worried about the CLARITY Act, quantum risk, Jim Cramer selling bags?
Hougan says he's been talking a lot in the last month with people from the world's largest wealth management platforms. Wells Fargo, UBS, Stifel, etc. The biggest surprise is: Their ship has already slowly turned. They don't care about short-term prices. They view crypto as an asset class that will form over the next decade. If a bear market happens, they know; these people are smart, but they understand it's part of the asset class.
Hougan gives a concrete example: Morgan Stanley approved the Solana ETF during a market downturn. Not because of FOMO. On the contrary.
VII. On-Chain Asset Management & ETH at $8000
Host: What are your thoughts on on-chain vaults and asset management? Which assets benefit the most?
Hougan says Bitwise's own vault business has grown significantly this year, despite crypto market uncertainty. He believes on-chain asset management will be huge; vaults are one primitive, but not the only one. Other forms of on-chain asset management will emerge within 3 to 6 months. Capital will flow in two directions: First, income-generating strategies (funding rate arb, etc.), where on-chain assets offer unique income opportunities that off-chain assets don't; Second, tokenized stock portfolios, which are more flexible on-chain than in traditional wrappers. Also, on-chain exclusives: perps, pre-IPO stocks, etc.
The host asks about institutional interest in altcoins. Hougan says there are two areas: First, the stablecoin and tokenization theme. Institutions are looking for exposure to this theme. Circle, Securitize, Robinhood are traditional answers, but the on-chain answers are Ethereum, Solana, Chainlink, Ondo. Hougan says: These institutional investors haven't heard of Ondo, but they are asking what it is. Second, real yield. Hyperliquid is the most obvious example. But there are real yield projects across the entire crypto stack.
The host mentions ETH. Hougan's ETH bull thesis: On-chain asset value will grow 10x to 100x. ETH leads in tokenization and stablecoin market share. ETH's two questions: Can it continue to absorb on-chain assets? Hougan thinks yes (Lindy effect: trust, brand, time). How to translate market share into value? The community focuses on "ETH as a monetary asset value," which Hougan finds interesting but not fully convinced yet. His ETH target price is $8000 (Bitwise's official forecast).
VIII. 5% is a Free Lunch, 0% is Actively Bearish
Host: Bitwise recommends a 5% crypto allocation. How did that number come about?
Hougan: 5% is a magic number. Below 5%, adding crypto to a portfolio can significantly improve returns, but the overall portfolio volatility barely changes. Stocks still drive portfolio volatility. You get what the financial literature calls a "free lunch": diversification benefits and upside potential with almost no added risk. Above 5%, returns continue to rise, but volatility also starts to increase substantially.
The host adds: Other asset managers have recommended higher allocations. Hougan jokes: "It's better for my business if you 100% YOLO, but we're doing the responsible thing."
Hougan's most counterintuitive judgment: 0% is extremely bearish. Global stocks are $110 trillion, crypto is $2.5 trillion. If you aim for a neutral weight, it should be about 2%. 5% is mildly bullish, 0% is extremely bearish. Having zero allocation means you are effectively making an active bearish judgment. You are off the market.
Host's closing remark: At this point in time, having zero allocation to crypto is a huge risk.
