Bitwise Chief Investment Officer Matt Hougan and Head of Research Ryan Rasmussen said on The Rollup podcast that Bitcoin’s ability to absorb a run of negative headlines without falling may be one of the clearest signs that the market is near a bottom.
The episode was recorded with Bitcoin at roughly $65,000, down more than half from its October peak last year. Even so, the two Bitwise executives said they were watching a different signal: the market’s reaction function had changed.
Hougan said Bitcoin failed to break lower even as Strategy founder Saylor was selling, a cold wallet theft worth more than $100 million hit the market, and the Clarity bill stalled in the Senate. “When the market becomes completely numb to bad news, that’s often when the real bottom is in,” he said.
A market that may have already done most of its correction
The host asked whether the familiar script was still in play: one more summer washout, a clean bottom in October, then a move higher. Hougan said that narrative had become almost conventional wisdom in crypto.
He described posting a Buzz Lightyear meme that captured the mood: another flush in summer, a final leg down, a bottom in October, and then a straight climb, with everyone planning to get back in at the end of October. But he said the actual market behavior looked different.
Over the last two months, he said, the most striking development was that Bitcoin had stopped reacting to bad news. He repeated the examples one by one: Saylor selling Bitcoin, no reaction; a cold wallet theft worth more than $100 million, no reaction; the Clarity bill failing to advance, still no reaction.
Rasmussen added that in prior cycles, some of the biggest gains after a bear market ended came in the first few days. Investors waiting to time the exact low often missed the strongest stretch. Rather than waiting for Bitcoin in the low-$50,000 range, he said, investors should at least consider that much of this drawdown may already be behind the market.
The four-year cycle is still there, but the shape is changing
Rasmussen said the old four-year cycle framework has not disappeared, but the amplitude is compressing. This cycle’s drawdown from the high was 55%, far shallower than the 70% to 80% declines often seen in earlier periods. The upside expansions to new highs have also been smaller than they were in older cycles.
He also noted that 2025, viewed on a calendar-year basis, was itself a down year, which makes the old “three years up, one year down” pattern less reliable as a simple rule.
His explanation was straightforward: the buyer base has changed. Four years ago, retail dominated the market far more than it does now. Today, Bitwise is dealing every day with institutions, corporations, sovereign wealth funds, and family offices. Those buyers hold assets on different timelines, make decisions at a different pace, and operate in a market that is larger and more liquid than before.
Hougan said bear markets usually last longer than people expect, but under the right conditions Bitcoin could “get back to $100,000 within a matter of months.” He repeatedly described the next phase with one phrase: a slow bull market, more gradual, more grounded in fundamentals, and more institutional in character.
Why institutional buying moves slowly: eight meetings and a two-year education cycle
Both executives said ETFs are now the main gateway for institutional participation, much like the vehicles those investors already use for stocks and bonds. In the discussion, they said crypto ETFs were seeing net outflows through the end of June, then shifted into relatively strong net inflows from July 1 onward. Most of that demand was directed toward Bitcoin and Ethereum, with smaller flows into Solana and Hyperliquid.
Hougan said the timing makes sense if viewed through the lens of institutional decision-making. A typical Bitwise client, he said, needs eight meetings on average before making an allocation decision. In many cases, that client may meet only once a year. That turns into a two-year education cycle.
Because spot Bitcoin ETFs were approved in January 2024, he said, the summer of 2026 lines up with the point at which many of those educational cycles are finally ending and allocations can begin.
Institutional investment committees, he said, are no longer debating whether crypto belongs in a portfolio at all. The practical question is how to get thousands of advisers under them to start allocating. The answer usually begins with Bitcoin, then some Ethereum, and then a market-cap-weighted framework. “You always start with Bitcoin,” Hougan said.
Rasmussen framed the shift in even simpler terms: “The question is no longer ‘Should we invest in crypto?’ It’s ‘When do we invest in crypto?’”
A bifurcated bull market: institutions buy majors, on-chain capital buys applications
The clearest directional call in the conversation was that the next bull market may split into two separate arenas.
On one side sits institutional capital, which in their view will stay concentrated in large-cap assets capable of absorbing meaningful allocations, especially Bitcoin and Ethereum. On the other side is crypto-native capital on-chain, which they expect to target DeFi applications with real revenue and clearer tokenholder economics, including Hyperliquid, Uniswap, Aave, and Morpho.
Hougan said the first reason is simple market capacity. Money from firms such as UBS or Morgan Stanley cannot be placed efficiently into an asset like Uniswap at a $2.5 billion market capitalization. The liquidity mismatch is too large. Only a small number of the biggest crypto assets can realistically absorb institutional-scale positions.
The second reason is psychological. Investors with a 0% crypto allocation do not view a 55% drawdown the same way crypto-native holders do. For a new allocator, that decline can look like a discounted entry point. For someone who has already lived through the drawdown, it feels very different.
Rasmussen said on-chain capital is better positioned to understand stories such as Hyperliquid producing nearly $1 billion in annual revenue, or Uniswap and Morpho sending value back to tokenholders. That cash-flow framework, he said, has not fully reached institutions yet, but he expects it eventually will. In that gap, long-time crypto investors may still have room to move ahead of institutional buyers.
He also said, “DeFi will become in the next bull market what we thought it would become in 2021. The regulatory shackles have come off.”
Bitcoin as gold, Ethereum and Solana as software stocks
Rasmussen said Bitcoin is increasingly trading like gold, while Ethereum, Solana, and Hyperliquid are better understood through a technology or software-equity lens. In his words, “Bitcoin will increasingly look like gold, while Ethereum and Solana will increasingly look like software company stocks. They were always supposed to have different drivers.”
He said Bitcoin’s correlation with gold had risen meaningfully over the last year, and institutions were already valuing those categories through different frameworks. That does not mean one must fall when the other rises. It means the divergence in what moves them is likely to become more obvious.
Under that view, Bitcoin fits more naturally into macro allocation or a digital-gold role, while Ethereum, Solana, and similar assets are closer to risk assets linked to platform growth and software-like economics.
The biggest catalyst may sit outside crypto: $20 trillion in wealth-platform model portfolios
Hougan said crypto investors may be watching the wrong catalyst set. The more important source of marginal demand, in his view, may be the model portfolios used by giant wealth management platforms rather than the issues that dominate crypto-native discussion.
He specifically named Morgan Stanley, Wells Fargo, UBS, and Merrill Lynch. Combined, he said, those four wealth platforms oversee roughly $20 trillion in assets. Their model portfolios, the standard templates used by thousands of financial advisers, are being redesigned. Crypto has already appeared in limited pilot programs, including at Wells Fargo.
If those model portfolios eventually assign even 1% to 2% to crypto, Hougan said, the resulting flows would run into the hundreds of billions of dollars. Just as important, those flows would not come all at once. They would arrive year after year as part of a long allocation process.
Rasmussen added that the language from the broader wealth-advisory world has already shifted. In the discussion, he cited Ray Dalio recommending a 15% allocation to Bitcoin or gold, Ric Edelman recommending 20% to 40% crypto allocations for clients, and Charles Schwab saying portfolios can include 6% crypto. Five years ago, he said, comments like those would have been hard to imagine.
Regulation in focus: Reg Crypto review approaches as spot ETH ETFs log five straight weeks of inflows
Hougan also pointed to a regulatory variable that he said is becoming immediate. “The first draft of Reg Crypto is about to come out,” he said. He described it as a framework that would allow new projects to raise capital without triggering SEC registration at the outset, then move gradually toward decentralization. Washington moves slower than crypto is used to, he said, but in his view the proposal is substantive.
According to the article’s added context, ETH was around $1,900 as of August 13. Spot ETH ETFs had recorded five consecutive weeks of net inflows, with about $245 million coming in during the latest week, the strongest pace in nearly four months. The U.S. Securities and Exchange Commission was set to review the Reg Crypto proposal on August 14, putting the regulatory issue discussed in the podcast right in front of the market.
Macro backdrop: $600 billion in fourth-quarter borrowing and a still-hawkish Fed
On the macro side, Rasmussen said the last two years saw capital leave crypto and gold and move into AI-driven U.S. equities. Now, he said, some of that money is starting to come out of that crowded trade and look for other destinations.
In his conversations with institutional clients, he said, almost nobody is still asking whether they should own crypto. The discussion has moved to timing.
He argued that the long-term setup has not changed. The U.S. fiscal deficit is still widening, and the government has said it plans to borrow $600 billion in the fourth quarter, a figure he said is larger than the bank-rescue package associated with the Global Financial Crisis. In his view, that trend is not slowing and is, if anything, accelerating.
As for the Federal Reserve, Rasmussen said expectations for further rate hikes had eased, and the Jackson Hole speech later in the month could offer more direction. As markets adjust to a hawkish Fed stance and pressure from oil prices dulls, macro uncertainty may decline, giving institutions more confidence to make cross-asset allocations. In that setting, he said, crypto could be one of the beneficiaries of capital rotation in Q4 and in 2027.
Quick-fire calls: Bitcoin still leads, Ethereum interest is rising
In the podcast’s closing rapid-fire segment, Hougan said client demand is still led by Bitcoin, though interest in Ethereum is picking up as investors focus more on stablecoins and tokenization. Even then, he said, Bitcoin remains the starting point.
The host then threw out a series of long-term price prompts. On Bitcoin at $180,000 by 2030, both executives answered over. On Ethereum at $8,000, both again said over, though Hougan added that there were details inside that call worth separating out.
On Zcash reaching $25,000 to $30,000, both answered under. Rasmussen said that did not reflect a broad rejection of privacy coins. His point was that not every asset should be expected to rise together, and that a move from Bitcoin at roughly $65,000 today to the million-dollar range by 2030 may simply take longer than many investors assume.
Asked about HYPE at $500, roughly a 10x move implying a valuation of about $600 billion, both men leaned toward under. Rasmussen said the buyback structure could mean the fully intuitive market-cap estimate overstates the result, and he also warned that rotation among exchange or platform tokens has appeared before, which he sees as one of the larger risks in making a 2030 call.
When the host asked whether they preferred Robinhood (HOOD) or Hyperliquid (HYPE), the two split. Rasmussen favored HYPE, citing its smaller size, earlier cycle position, and greater leverage to the next bull market. Hougan said he wanted both, but described HOOD as the kind of “heirloom” asset investors could buy and hold for ten years because it is “an incredibly well-executed company.”
On Lighter, Rasmussen said plenty of people inside Bitwise are positive on the project and see the perpetual futures sector growing sharply over the next several years. In that framing, he said $30 looks more like a ceiling than a floor. Hougan declined to make a firm prediction on a platform he considered too new, leaving that call to Rasmussen.