The next crypto bull market is likely to be slower and less volatile than previous cycles, as institutional investors and advisory firms redirect their focus toward real-world applications such as tokenization and artificial intelligence, according to Matt Hougan, chief investment officer of asset manager Bitwise.
‘We’ve lost the attention of investors to other hot trends’
“Interest is as high as it’s ever been” among registered investment advisors (RIAs) serving high-net-worth individuals and institutional capital, Hougan said in an email interview. But he added that the market has “lost the attention of investors to other hot trends,” most notably AI. Hougan, a long-time bitcoin bull, still believes the largest cryptocurrency by market cap will top $1 million within ten years. “I have less certainty around how, when or if it has bottomed. I think we have to wait to see how the four-year cycle plays out.”
Bitcoin still 50% from all-time high; tokenization chains feel the heat
Bitcoin’s price remains nearly 50% below its October record high and is down 26% year-to-date. The broader CoinDesk 20 Index (CD20) has lost 34% in the same period. Blockchains linked to tokenization, such as Stellar, have also suffered, though XLM still posts a 8.9% gain this year.
Stablecoin market cap hits record $322 billion; Citi sees $4 trillion by 2030
Stablecoin demand continues to grow: the combined market value of dollar-pegged tokens recently hit a record $322 billion, surpassing the foreign exchange reserves of 95 countries including several developed nations. Citi projects the figure could reach $4 trillion by 2030.
While Hougan downplays the idea that crypto’s decline is solely driven by traditional finance’s shifting focus, he agrees it contributes to the drop and may prolong a recovery. “In bear markets, with doubts swirling, it’s easier for them to reach for something tangible. Stablecoins and tokenization are more tangible and ‘real-world’ to most people than bitcoin.”