Organization & Compilation: Deep Tide TechFlow

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

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

Disclaimer: 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 5% crypto allocation recommendation discussed in the program, ETH $8000 price target, Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, and other specific assets, Bitwise has product lines or research coverage. Hougan clearly states in the program that "100% YOLO is better for my business," but recommends a 5% allocation. Readers must judge his views based on this position.

Key Points Summary

Matt Hougan is the Chief Investment Officer of Bitwise, former CEO of ETF.com, and sold the company in three phases to FactSet, Informa, and BATS Global Markets; he is a co-author of two monographs from 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 now stands on the side of crypto, not as a KOL.

The biggest contrast in this episode is in the title: crypto has dropped 50% from its peak, but Hougan says Wall Street is instead ALL-IN. This is not a slogan. He provides specific evidence: the week when 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 prices and treat crypto as an asset class that will mature over the next decade. Morgan Stanley approved the Solana ETF during the market downturn, not because of FOMO, but quite the opposite.

The two most important judgments from Hougan: first, BTC no longer cares about bad news; the AI bubble bursting, Saylor selling BTC, and the probability of the CLARITY Act dropping from 40% to 14% have all resulted in BTC rebounding. "Those who needed to sell have sold, and the rest 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, and a neutral weight should be around 2%. If you are at 0%, you are effectively making an active bearish judgment.

Highlights of Opinions

On the CLARITY Act and Regulation

"This bill will never die, and 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 after 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 genie back in the bottle."

On BTC Price Action

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

On DCA vs Lump Sum Purchase

"Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance, preventing you from panic selling and then chasing higher prices. But from an absolute return perspective, Jan is right; BTC may explode upwards quickly." "If you truly believe this coin will reach $1 million, why risk that $5000? Buy $5000 in 2018, $3500 in 2019, and now at $63000, and ultimately they all did well."

On the Consensus for the Bottom in October

"I hear three or four people every day say October will hit the bottom, which makes me nervous. Once a consensus forms, it often does not happen that way." "The calendar is indeed a reliable indicator of BTC returns. It may drop to the $50K range. But I remain optimistic for the end of the year. The upside space is much larger than the downside space."

On Institutional Dynamics

"The boats of platforms like Wells Fargo, UBS, and Stifel have already begun to slowly turn. They do not care about short-term prices; they see crypto as an asset class that will mature over the next decade." "Morgan Stanley approving the Solana ETF is not due to FOMO. On the contrary, they approved it during a market downturn."

On the 5% Allocation

"5% is a magic number. Below 5%, the return will significantly improve with almost no change in overall portfolio volatility." "Above 5%, returns continue to rise, but volatility also starts to increase significantly." "0% is not neutral, it is extremely bearish. Global stocks are $110 trillion, crypto is $2.5 trillion, and neutrality should be around 2%. A 5% allocation is moderately bullish, while 0% is extremely bearish. If you have zero allocation, you are effectively making an active bearish judgment."

Main Text

1. CLARITY Act Did Not Pass, but Crypto Will Not Wait

Host John Gillen: In your recent CIO memo, you wrote that even if the CLARITY Act does not pass, it will not really die, and crypto will continue to proceed. Can you elaborate?

Matt Hougan said that when he wrote that memo, everyone expected a final result by August 5th or 7th because Congress was about to recess, and people had circled the dates for months. However, he realized closer to the date that this is not how Washington operates. As expected, as the recess approached, senators began indicating "let's talk in September" and "we'll address it during the lame-duck period." His judgment prepared for clients was: what was initially 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 linger on.

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

Another judgment is also proving correct: crypto will not wait for it. Wall Street will continue to push for tokenization, and people will continue to promote stablecoins. Hougan emphasizes that crypto itself will continue to build.

The host added: he previously interviewed Certa Labs Chief Legal Officer Rebecca Rettig, who said, "Washington's bills will die nine times before finally passing." Rettig has previously worked on Capitol Hill. Hougan said he has not completely given up hope.

2. 24/7 Stock Trading and Tokenization: BlackRock Will 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." Are you referring to the SEC pushing for innovative 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 generates more profit than trading 9:30 to 4:00, five days a week. The global population of 8 billion can generate more from trading than the hundreds of millions in the US. So they will pursue this. That’s why you see all these tokenization projects, and all these companies talking about it in earnings calls. The limiting factor has always been regulation. If the SEC really implements rules to take tokenized trading from "here" to "there," Wall Street will run 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 in the millions. The global stock market is $110 trillion. There’s a difference of several hundred times. Later, Hougan added that this $110 trillion figure is outdated and could be $125 trillion after the bull market. Global total assets are $670 trillion.

The host added a piece of evidence: the week that 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 story of Uber and Airbnb. Consumers and companies are ahead of regulation because the demand is clear, and they believe they can operate in compliance. Regulation will eventually catch up. BlackRock is doing this because they believe they can comply, they know demand is there, and they understand the world is moving toward tokenizing all assets, and they want to continue to be the largest asset manager in that world, just as they are in the current world of paper certificates.

3. The anti-crypto army is a dying breed

Host: The CLARITY Act battle reminds us that the anti-crypto army is not completely dead. Some openly celebrated the failure of the CLARITY Act. Is this regulatory risk still present?

Hougan: It is always a risk. You never know if extreme political factions will regain power. But when pushing this forward are not just crypto proponents, but also BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered, it becomes very difficult to stuff this genie back into the bottle.

He acknowledges that there may be challenges in some corners: developer liability has uncertainties. But regarding the big direction of "moving assets on-chain," the anti-crypto army can't take that back. He said these people are a dying breed.

The host added a report from Standard Chartered released this week: they forecast that by 2030, on-chain tokenized assets will reach $4 trillion, with a target price of $200 for Chainlink. Hougan said, if regulation is in place, Standard Chartered's numbers could still be conservative. Once these things gain traction, they will snowball rapidly. The world is large. $670 trillion in global assets, 4% is $24 trillion or more, with currently less than 1% on-chain.

Hougan's most counterintuitive judgment: the reason tokenized RWA is currently so small is precisely because reluctant regulators have held it back for many years. Once released, it will jump due to pent-up demand.

4. BTC's sideways action is good: bear markets die from apathy

Host: BTC has been sideways this past few weeks; what are your thoughts?

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

He lists recent bad news: volatility in AI stocks (notably the situational awareness liquidation leading to significant momentum compression trading), 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: those who needed to sell have sold. The remaining people believe this coin will reach $1 million. They do not care if the AI bubble bursts. This is ultimately good for BTC. Hougan feels reassured by BTC's sideways action rather than worried.

5. DCA vs Buy Now, Consensus for the Bottom in October

Host: I have interviewed Jan VanEck and Matthew Siegel from VanEck. Jan said, "Don't get fancy, build your position now." Matthew said, "DCA into the market now until Q4." What do you think? How does Bitwise operate?

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

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

The host added regarding the consensus for the bottom in October: he hears many people saying BTC will hit the bottom in October, which makes him nervous, as once a consensus forms, it often does not happen that way. Hougan admits this consensus is strong; he hears three or four people say it every day, which also makes him nervous. But the historical return of BTC based on the calendar has always been a reliable indicator, and he can't refute that. Consensus suggests it may drop to the $50K range. But if you believe it will hit $1 million, why risk that $5000? Buy $5000 in 2018, $3500 in 2019, and now at $63000, ultimately they all have done well.

Hougan's judgment: I see higher by the end of the year. The path in between depends on many factors, but the upside space is much larger than the downside space.

6. Institutional Dynamics: Wells Fargo, UBS, Morgan Stanley Are All Turning

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

Hougan said he has talked a lot with people from the world's largest wealth management platforms recently, including Wells Fargo, UBS, and Stifel. The biggest surprise: their boats have already started to slowly turn. They do not care about short-term prices. They view crypto as an asset class that will mature over the next decade. They know the bear market has occurred; 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 due to FOMO. Quite the opposite.

7. On-chain Asset Management and ETH $8000

Host: What are your views on on-chain vaults and asset management? Which assets will benefit the most?

Hougan said that Bitwise’s own vault business has significantly grown this year despite the uncertainty in the crypto market. He believes that 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 three to six months. Funds will move in two directions: first, revenue-generating strategies (such as funding rate arb), on-chain assets provide unique revenue opportunities that off-chain assets cannot. Second, a portfolio of tokenized stocks, which is more flexible on-chain than traditional shells. There are also unique on-chain opportunities: perps, pre-IPO stocks, etc.

The host asked about institutional interest in altcoins. Hougan said there are two areas: first, stablecoins and the 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 noted that these institutional investors haven't 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.

Host mentioned ETH. Hougan's bullish argument for ETH: the total on-chain assets may increase 10 to 100 times. ETH leads in market share for tokenization and stablecoins. Two challenges for ETH: Whether it can continue to absorb on-chain assets, Hougan believes it will (Lindy effect: trust, brand, time); How to translate market share into value; the community focuses on "the monetary asset value of ETH," which Hougan finds interesting but not fully established yet. His ETH target price is $8000 (Bitwise's official prediction).

8. 5% Is Free Lunch, 0% Is Active Bearish

Host: Bitwise recommends a 5% crypto allocation. How did you come up with that number?

Hougan: 5% is a magic number. Below 5%, adding crypto to the portfolio significantly enhances returns while almost not changing overall portfolio volatility. Stocks still drive portfolio volatility; you are getting what financial literature calls "free lunch": diversified returns and upside potential without much added risk. Above 5%, returns continue to rise, but volatility 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. Global stocks are $110 trillion, crypto is $2.5 trillion. If you are doing neutral weight, it should be around 2%. 5% is moderately bullish, while 0% is extremely bearish. If you have zero allocation, you are effectively making an active bearish judgment. You are off the market.

The host concluded: at this point in time, being 0% in crypto is a significant risk.