Bitwise CIO Matt: If you have 0% crypto allocation right now, it means you are actively bearish on the market outlook

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

Release Date: Recorded on August 12, 2026, uploaded on August 13

Compiled by: Deep Tide TechFlow

Disclaimer: This article is a reprint. Readers can obtain more information through the original link. If the author has any objections to the form of reprint, please contact us, and we will make modifications as per the author's request. Reprinting is for information sharing only and does not constitute any investment advice, nor does it represent the views and positions of Wu Shuo.

Conflict of Interest Statement: Matt Hougan is the Chief Investment Officer of Bitwise Asset Management. Bitwise manages over $15 billion in crypto assets, with products including BTC/ETH/SOL spot ETFs, on-chain vaults, active strategies, etc. The specific assets discussed in the program, such as the 5% crypto allocation suggestion, ETH target price of $8000, Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, etc., are all covered by Bitwise's product lines or research. Hougan clearly stated in the program, "Bitwise's business is 100% YOLO for me," but recommends a 5% allocation. Readers should judge his views based on this position.

Key Points Summary

Matt Hougan is the Chief Investment Officer of Bitwise, former CEO of ETF.com, who sold the company in three transactions to FactSet, Informa, and BATS Global Markets; he is a co-author of two monographs on ETFs and crypto assets for the CFA Institute 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 crypto side, not a KOL.

The biggest contrast in this episode is in the title: crypto has fallen 50% from its peak, but Hougan says Wall Street is ALL-IN. This is not just a slogan. He provides specific 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 major wealth management platforms like Wells Fargo, UBS, and Stifel told him they don't care about short-term prices and view crypto as an asset class that will mature over the next 10 years. Morgan Stanley approved the Solana ETF during the market downturn, not out of FOMO, but quite the opposite.

Hougan's two most important judgments: First, BTC no longer cares about bad news; the AI bubble burst, Saylor sold BTC, and the probability of the CLARITY Act dropped from 40% to 14%, yet BTC rebounded. "Those who should sell have sold; the rest believe it will reach $1 million." Second, a 0% crypto allocation is not neutral; it is extremely bearish. The global stock market is $110 trillion, crypto is $2.5 trillion, and a neutral weight should be about 2%. If you have zero exposure, you are effectively making an active bearish judgment.

Highlights of Insights

On the CLARITY Act and Regulation

"This bill will never die; it may never pass. It will always exist in a 'half-dead' state." "Crypto will not wait for it. BlackRock will announce tokenized funds the week the Senate postpones." "Those against crypto are a dying breed. When BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered are all pushing from behind, no one can put this back in the bottle."

On BTC Price Behavior

"Bears die from apathy. You know a bear market is dead when the market no longer reacts to bad news." "Those who should sell have sold. The remaining believe this coin will reach $1 million. They don't care if the AI bubble bursts." "BTC's sideways movement is a good thing. Volatility has been compressed, and when it releases upwards, it will be quick."

On DCA vs. Lump-Sum Buying

"Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance, preventing you from panic selling and then chasing high. But from an absolute return perspective, Jan is right; BTC may explode upwards soon." "If you truly believe this coin will reach $1 million, why gamble on that $5,000? Buying at $5,000 in 2018, $3,500 in 2019, and now at $63,000, all have turned out well."

On the October Bottom Consensus

"I hear three or four people every day say October will be the bottom, which makes me nervous. Once a consensus forms, it often doesn't happen that way." "The calendar is indeed a reliable indicator of BTC returns. It may drop to the $50K range. But by the end of the year, I am optimistic for higher. The upside potential is much greater than the downside."

On Institutional Dynamics

"Wells Fargo, UBS, and Stifel's ships have already started to turn slowly. They don't care about short-term prices; they view crypto as an asset class that will mature over the next 10 years." "Morgan Stanley's approval of the Solana ETF was not due to FOMO. Quite the opposite; they approved it during a market downturn."

On the 5% Allocation

"5% is a magic number. Below 5%, adding crypto to your portfolio significantly enhances returns while keeping overall portfolio volatility nearly unchanged." "Above 5%, returns continue to rise, but volatility also starts to increase significantly." "0% is not neutral; it is extremely bearish. The global stock market is $110 trillion, crypto is $2.5 trillion, and neutral should be about 2%. A 0% allocation means you are making an active bearish judgment."

Main Text

I. The CLARITY Act Did Not Pass, But Crypto Will Not Wait

Host John Gillen: You wrote in your recent CIO memo that even if the CLARITY Act does not pass, it will not truly die, and crypto will continue to move forward. Can you elaborate?

Matt Hougan said that when he wrote that memo, everyone expected a final result on August 5 or 7 because Congress was about to recess, and everyone circled those dates for months. But as the date approached, he realized this is not how Washington operates. Sure enough, as the recess approached, senators began to hint, "We'll talk about it in September" and "We'll discuss it during the lame duck session." His judgment prepared for clients was that what was originally thought to be a decisive moment turned out to be a dud. Indeed, there was no vote before the August recess, and at the last moment, a senator requested a potential vote in September, so this matter continues to drag on.

Hougan's core judgment: This bill will never die; it may never pass. It will always exist in a 'half-dead' state. He also said he could be wrong; if political pressure mounts, it might pass before the election, but the base case is that the CLARITY Act will remain in a 'half-dead' state until the end of this year.

Another judgment is also proving true: Crypto does not wait for it. Wall Street will continue to push for tokenization, and people will continue to push for 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, "Washington's bills will die nine times before finally passing." Rettig has worked on Capitol Hill before. Hougan said he hasn't completely given up hope.

II. 24/7 Stock Trading and Tokenization: BlackRock Does Not Wait for Regulation

Host: You tweeted an hour ago that "24/7 stock trading will happen at a larger and faster pace than most people expect." Is this referring to the SEC advancing innovation exemptions to allow tokenized stock trading? Why are you so optimistic?

Hougan's logic is simple: Financial institutions love to make money. Trading stocks 24/7/365 earns more than the 9:30 to 4:00 five days a week. The global population of 8 billion can buy more than the few hundred million in the U.S. So they will do it. This is why you see all these tokenization projects and all these companies discussing this in conference calls. The limiting factor has always been regulation. If the SEC really issues rules to take tokenized trading from "here" to "there," Wall Street will rush through that door.

Hougan pointed out a contrast: The tokenized market is currently ridiculously small. On-chain assets are $300 billion, while tokenized stocks are only a few hundred million. The global stock market is $110 trillion. That's a difference of several hundred times. Hougan later mentioned that this $110 trillion is outdated and could be $125 trillion after the bull market. The total global assets are $670 trillion.

The host provided evidence: The 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 that this is the script for Uber and Airbnb. Consumers and companies are ahead of regulation because the demand is clear, and they feel they can operate in compliance. Regulation will eventually catch up. BlackRock is doing this because they believe they can comply; they know the demand is there, and they know the world is moving towards tokenizing all assets. They want to remain the largest asset manager in that world, just as they are in the current paper certificate world.

III. The Anti-Crypto Army is a Dying Breed

Host: The battle over the CLARITY Act reminds us that the anti-crypto army is not dead yet. Some openly celebrate that the CLARITY Act did not pass. Is this regulatory risk still present?

Hougan: It is always a risk. You never know if extreme political factions will regain power. But when the push for this comes not just from crypto, but also from BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered, it becomes very difficult to put it back in the bottle.

He acknowledged that there will be challenges in some corners: developer liability has uncertainties. But the overarching direction of "moving assets on-chain" cannot be rolled back by the anti-crypto army. He said these people are a dying breed.

The host added that Standard Chartered released a report this week: predicting $4 trillion in on-chain tokenized assets by 2030, while giving Chainlink a target price of $200. Hougan said that if regulation is in place, Standard Chartered's numbers might even be conservative. Once these things start to snowball, they will happen very quickly. The world is vast. With $670 trillion in global assets, 4% is over $24 trillion, and currently, on-chain is less than 1%.

Hougan's most counterintuitive judgment: The tokenization of RWA is currently so small precisely because reluctant regulators have held it back for many years. Once they loosen up, it will be pent-up demand that surges.

IV. BTC's Sideways Movement is a Good Thing: Bears Die from Apathy

Host: BTC has been moving sideways these weeks; what do you think?

Hougan's answer was unexpected: "Bear markets die in apathy. You know a bear market is dead when the market no longer reacts to bad news."

He listed recent bad news: AI stock volatility (significant momentum compression trading triggered by Situational Awareness), Saylor selling a large amount of BTC, and the probability of the CLARITY Act dropping from 40% to 14%. BTC actually rose.

Hougan's explanation: Those who should sell have sold. The remaining believe this coin will reach $1 million. They don't care if the AI bubble bursts. This is ultimately good for BTC. Hougan feels reassured by BTC's sideways movement rather than worried.

V. DCA vs. Buy Now, October Bottom Consensus

Host: I have interviewed Jan VanEck and Matthew Siegel from VanEck. Jan said, "Don't be fancy; build your position now." Matthew said, "DCA in now until Q4." What do you think? How does Bitwise approach this?

Hougan: They are both right. Matthew is correct on a behavioral level. One of the biggest risks in crypto is behavioral risk: buying in, dropping 15%, panic selling, and then chasing the new high. DCA is behavioral insurance: buy 10% this month, and if it drops next month, you are happy to buy another 10%. If you believe it will rise, DCA gives you a mechanism to combat panic.

But from an absolute return perspective, Jan is right. Hougan believes BTC's volatility has been compressed, and when it releases upwards, it will be quick. If you are pursuing absolute returns, you should be fully invested now.

The host added about 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 does not happen that way. Hougan admitted that this consensus is strong; he hears three or four people say it every day, which also makes him nervous. But BTC's calendar returns have historically been a reliable indicator, and he cannot refute that. The consensus is that it may drop to the $50K range. But if you believe it will reach $1 million, why gamble on that $5,000? Buying at $5,000 in 2018, $3,500 in 2019, and now at $63,000, all have turned out well.

Hougan's judgment: I am optimistic for higher by the end of the year. The intermediate path depends on many factors, but the upside potential is much greater than the downside.

VI. Institutional Dynamics: Wells Fargo, UBS, and Morgan Stanley are All Turning

Host: What have you been discussing with clients recently? Are they worried about the CLARITY Act, quantum risk, or Jim Cramer selling?

Hougan said he has talked a lot with people from the world's largest wealth management platforms over the past month. Wells Fargo, UBS, Stifel, etc. The biggest surprise is: their ships have already started to turn slowly. They don't care about short-term prices. They view crypto as an asset class that will mature over the next 10 years. They know the bear market has happened; these people are smart, but they understand this is part of the asset class.

Hougan gave a specific example: Morgan Stanley approved the Solana ETF during the market downturn. Not because of FOMO. Quite the opposite.

VII. On-Chain Asset Management and ETH $8000

Host: What do you think about on-chain vaults and asset management? Which assets will benefit the most?

Hougan said Bitwise's own vault business has grown significantly this year, despite the uncertainty in the crypto market. He believes on-chain asset management will be enormous; vaults are one primitive, but not the only one. Other on-chain asset management methods will emerge within 3 to 6 months. Funds will flow in two directions: first, income-generating strategies (like funding rate arbitrage), where on-chain assets provide unique income opportunities that off-chain assets cannot; second, tokenized stock portfolios, which are more flexible on-chain than traditional shells. There are also on-chain unique offerings: perps, pre-IPO stocks, etc.

The host asked about institutional interest in altcoins. Hougan mentioned two areas: First, stablecoins and tokenization themes. Institutions are looking for exposure to this theme. Circle, Securitize, and Robinhood are traditional answers, but the on-chain answers are Ethereum, Solana, Chainlink, and Ondo. Hougan said: These institutional investors have not heard of Ondo, but they are asking what it is. Second, real income. Hyperliquid is the most obvious example. But the entire crypto stack has real income projects.

The host mentioned ETH. Hougan's bullish argument for ETH: the total amount of on-chain assets will increase by 10 to 100 times. ETH leads in market share for tokenization and stablecoins. The two questions for ETH: Can it continue to absorb on-chain assets? Hougan believes it can (Lindy effect: trust, brand, time); How to convert market share into value? The community focuses on "ETH monetary asset value," which Hougan finds interesting but not fully established yet. His target price for ETH 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 you arrive at this number?

Hougan: 5% is a magic number. Below 5%, adding crypto to your portfolio can significantly enhance returns, but the overall portfolio volatility remains nearly unchanged. Stocks are still driving portfolio volatility; you are getting what financial literature calls a "free lunch": diversified returns and upside potential with almost no added risk. Above 5%, returns continue to rise, but volatility also starts to increase significantly.

The host added that other asset managers have recommended higher allocations. Hougan joked: "You being 100% YOLO is better for my business, but we are doing responsible things."

Hougan's most counterintuitive judgment: 0% is extremely bearish. The global stock market is $110 trillion, crypto is $2.5 trillion. If you are doing a neutral weight, it should be about 2%. 5% is moderately bullish, while 0% is extremely bearish. If you have zero exposure, you are effectively making an active bearish judgment. You are off the market.

The host concluded: At this point, having zero exposure to crypto is a huge risk.