Matt Hougan, chief investment officer at Bitwise Asset Management, said crypto is not waiting for Washington and that a 0% allocation to the sector should be understood as an active bearish position rather than a neutral one.
Speaking on The Milk Road Show with host John Gillen, Hougan argued that Wall Street is still pushing into tokenization and digital assets even after a steep drawdown from prior highs. The episode was recorded on Aug. 12, 2026 and uploaded on Aug. 13. It was sourced from Milk Road and later translated by TechFlow.
CLARITY Act may stay in limbo, but crypto keeps moving
Hougan said many people had expected a final outcome on the CLARITY Act around Aug. 5 or Aug. 7 before Congress went into recess, and those dates had been circled for months. As the deadline approached, he said it became clear that Washington was unlikely to work that neatly. Senators began signaling that the issue could be pushed to September or even to the lame-duck session.
That is effectively what happened. No vote was completed before the August recess, and a senator moved at the last minute to preserve the possibility of a September vote. Hougan said he had told clients that what had looked like a decisive moment was likely to turn into a dud, and that was how it played out.
His base case is that the bill never fully dies, but may also never fully pass. He described it as something that could remain in a semi-alive state for an extended period. He added that he could be wrong and that political pressure might still get it through before the election, but his central expectation is that CLARITY stays unresolved through the end of the year.
What matters more to him is that the industry is not standing still. Wall Street will keep working on tokenization, stablecoin efforts will continue, and crypto builders will keep shipping products regardless of whether the legislation reaches a final answer soon.
Gillen added that he had previously interviewed Certa Labs chief legal officer Rebecca Rettig, who said bills in Washington die many times before they finally pass. Hougan said he has not completely given up on the process.
Why Hougan thinks 24/7 stock trading and tokenization will expand
Gillen asked Hougan about a recent post in which he said 24/7 stock trading will happen faster and on a larger scale than most people expect, and whether that was tied to the Securities and Exchange Commission moving on innovation exemptions for tokenized stock trading.
Hougan’s answer was blunt: financial institutions like to make money. A market that trades 24/7/365 is commercially more attractive than one that runs from 9:30 a.m. to 4:00 p.m. five days a week. A market open to 8 billion people worldwide is also more attractive than one limited to a few hundred million in the United States. He said that basic incentive explains why so many tokenization projects exist and why so many companies now discuss the topic on earnings calls.
In his view, regulation has been the main bottleneck. If the SEC puts forward rules that move tokenized trading from where it is now to a clearer operating framework, Wall Street will move through that opening quickly.
He also stressed how small the market still is today. Onchain assets stand at about $300 billion, while tokenized equities account for only a few hundred million dollars. Global equities, he said, are worth about $110 trillion, though he later noted that number may already be stale and could now be closer to $125 trillion after the bull market. He put total global assets at $670 trillion.
Gillen pointed to one example that Hougan said captured the dynamic. In the same week the Senate pushed the CLARITY Act vote back by a full month, BlackRock announced two tokenized funds on Ethereum and other chains. Hougan said that is the same playbook seen with companies like Uber and Airbnb: consumers and companies move first because the demand is obvious and they believe they can operate within the rules, then regulation catches up later.
He said BlackRock is moving because it believes it can do this in a compliant way, because it sees real demand, and because it sees the world moving toward the tokenization of all assets. If that is the direction of travel, the largest asset manager in the world wants to remain the largest in that future system too.
Anti-crypto politics remain a risk, but Hougan says the broader direction is hard to reverse
Asked whether the CLARITY setback showed that anti-crypto forces still had real power, Hougan said political risk never disappears. He said nobody can rule out the return of extreme factions.
Still, he drew a distinction between isolated political resistance and the bigger institutional trend. Once the push is backed not only by crypto-native companies but also by BlackRock, Nasdaq, the New York Stock Exchange, JPMorgan, and Standard Chartered, he said it becomes very hard to force the trend back into the bottle.
He acknowledged there are still areas of uncertainty, including developer liability. But he said the broader effort to move assets onchain is not something the anti-crypto camp can unwind. He described that camp as a dying breed.
Gillen also cited a Standard Chartered report published that week. The bank projected $4 trillion in tokenized onchain assets by 2030 and gave Chainlink a 200 price target. Hougan said that number could even prove conservative if regulation becomes supportive enough.
His reasoning was scale. If tokenization gets rolling, he said, it can snowball fast. Out of $670 trillion in global assets, even 4% moving onchain would amount to more than $24 trillion. Right now, onchain assets still represent less than 1% of that base. He argued that the small size of tokenized real-world assets today reflects years of regulatory reluctance, and that pent-up demand could surface quickly once constraints loosen.
Bitcoin’s muted response to bad news matters
On Bitcoin’s sideways trading over recent weeks, Hougan made one of his strongest points. Bear markets, he said, die in apathy. You know the bear market is really done when the market stops reacting to bad news.
He pointed to several negative developments: volatility in AI-related equities, a notable momentum compression trade tied to the Situational Awareness blowup, Michael Saylor selling large amounts of BTC, and the implied odds of the CLARITY Act dropping from 40% to 14%. Bitcoin rose anyway.
His interpretation was simple. The people who wanted to sell have already sold. The people left in the market believe Bitcoin can reach $1 million, and are not especially concerned about whether the AI bubble bursts. For that reason, he said Bitcoin trading sideways is reassuring rather than troubling.
DCA versus buying now, and the October bottom debate
Gillen said he had recently spoken with VanEck chief executive Jan VanEck and Matthew Siegel. Jan’s view was to stop getting fancy and buy now. Siegel’s was to dollar-cost average into the market between now and the fourth quarter.
Hougan said both arguments work, but in different ways. He said Siegel is right on behavior. One of the biggest risks in crypto is not just market risk but behavioral risk: buying, watching the market drop 15%, panic selling, and then chasing again at new highs. DCA functions as behavioral insurance because it gives investors a structure that makes declines easier to live with. If prices fall this month, the next scheduled purchase becomes psychologically easier.
On pure return potential, though, he said Jan is right. Hougan argued that Bitcoin’s volatility has been compressed and that when the move breaks higher, it could happen quickly. If the goal is absolute return, his view is that investors should be fully positioned now.
Gillen then raised the growing market consensus that Bitcoin could bottom in October. Hougan said hearing the same call from three or four people a day makes him uneasy, because once consensus becomes too obvious, markets often break the pattern. Even so, he conceded that Bitcoin’s historical calendar returns have been a reliable indicator, and that point is not easy to dismiss.
The consensus path he described included a possible dip into the $50,000 range. Hougan’s answer was that if someone genuinely believes Bitcoin can reach $1 million, arguing over a $5,000 difference in entry price is missing the bigger picture. He said buying at $5,000 in 2018, at $3,500 in 2019, or at $63,000 now all end up looking fine if the long-term thesis holds.
His own view is that Bitcoin ends the year higher. The path in between may vary, but he said upside is much larger than downside.
Large wealth platforms are shifting, slowly
Hougan said many of his recent conversations have been with some of the world’s largest wealth management platforms, including Wells Fargo, UBS, and Stifel. What stood out to him was that these firms are slowly turning.
He said they are not focused on short-term price action. Instead, they increasingly view crypto as an asset class that will take shape over the next decade. They understand bear markets happen and see that volatility as part of the category rather than a reason to step away.
He offered Morgan Stanley as a specific example. According to Hougan, the firm approved a Solana ETF while the market was down. That timing, he said, was the opposite of FOMO. It suggested an institutional decision made in a weak tape rather than in a euphoric one.
Onchain asset management, vaults, and Bitwise’s $8,000 ETH target
When the discussion turned to onchain asset management, Hougan said Bitwise’s own vault business has grown sharply this year despite broader uncertainty across crypto markets. He expects onchain asset management to become a very large category, with vaults representing one primitive rather than the only model.
He said other forms of onchain asset management should emerge within three to six months. In his view, capital will move in two main directions. One is income-generating strategies such as funding-rate arbitrage, where onchain markets can offer opportunities traditional markets do not. The other is tokenized equity portfolios, where onchain wrappers can be more flexible than traditional structures. He also pointed to opportunities that are more native to crypto markets, including perpetuals and pre-IPO equities.
Asked where institutional demand for altcoin exposure is showing up, Hougan said there are two main buckets. The first is stablecoins and tokenization. Investors want exposure to that theme. In traditional markets, that may mean names like Circle, Securitize, and Robinhood. Onchain, the related expressions are Ethereum, Solana, Chainlink, and Ondo. He said some institutional investors had not heard of Ondo before, but are now asking what it is.
The second bucket is real revenue. Hougan said Hyperliquid is the clearest example, while adding that revenue-generating businesses now exist across much of the crypto stack.
On Ethereum, Hougan laid out a bullish case built on scale. He said total onchain assets could grow by 10x to 100x, and Ethereum still leads in tokenization and stablecoins by market share. He framed two core questions for ETH. First, can it continue absorbing onchain assets? His answer was yes, driven by trust, brand, and time, which he tied to the Lindy effect. Second, how does that market share turn into value? He said the community’s focus on ETH as a monetary asset is interesting, though not fully proven in his view. He cited Bitwise’s official $8,000 target for ETH.
Why Bitwise keeps returning to a 5% allocation
Hougan said 5% is the magic number in Bitwise’s portfolio framework. Below that level, adding crypto can materially improve returns while leaving overall portfolio volatility almost unchanged, because equities still dominate the volatility profile. He described that as close to the classic free lunch in portfolio theory: diversification and upside without a major increase in total risk.
Above 5%, he said, returns may continue to rise, but volatility begins to increase more sharply as well.
When Gillen noted that some other asset managers have argued for higher allocations, Hougan joked that Bitwise’s business would benefit more if investors went 100% YOLO, but said the firm is trying to be responsible.
His most pointed claim was about zero exposure. Global equities, he said, are worth roughly $110 trillion and crypto about $2.5 trillion. A neutral market-weight exposure would therefore be around 2%. On that basis, 5% is a mild overweight, while 0% is not neutral at all. It is an intentional bearish call.
As he put it, investors with no crypto exposure are effectively making an active decision to be out of the market. Gillen closed the interview by saying that, at this point in the cycle, having no crypto allocation at all is itself a major risk.