Matt Hougan - The 13X Opportunity: The Wave Of Institutional Capital Is Going To Be EXTRAORDINARY

本站添加: 2026-05-11

[00:00:00]Look, I think the wave of institutional capital that's going to come into the space is going to be extraordinary and based on what I'm seeing in the field, it's really starting to accelerate. I think that's one of the reasons we've recovered from where we were in February to today. [music] Who have studied this asset but weren't able to invest cuz there weren't ETFs, they weren't available on their platforms. Now they can invest and the market was down 50% from its all-time highs. That's a pretty attractive entry point. So I think I think you'll continue to see that throughout the year. It doesn't guarantee Bitcoin goes up, but it does mean these people see this as an opportunity if they're going to hold this asset for multiple years to get in at a pretty attractive entry point.

[00:00:41]>> What if the biggest Bitcoin bull market hasn't even started yet? Matt Hougan just revealed that out of 170 financial advisors in one room, 150 already personally owned Bitcoin or crypto. Two years ago, almost none of them did. Wall Street isn't laughing at Bitcoin anymore. It's quietly accumulating it.

[00:01:02]And according to Hougan, this could be the early stage of a massive wave of institutional money about to enter the market. Please take a little time to like this video, subscribe to the channel, and turn on post notifications for more videos like this. You can also check out our other videos on cryptocurrencies and the overall digital asset space and drop your comments and observations in the comment section below.

[00:01:26]Everything you do helps with the YouTube algorithm and immensely contributes to the channel's growth. Thanks and enjoy the video. There were about 170 advisors in the room and I asked at the start of my talk, "How many of you own Bitcoin?"

[00:01:40]Or own a crypto asset. And usually when I do that, it's like 10, 15% of the room.

[00:01:46]Uh Alex, it was 150 people raised their hand. Wow.

[00:01:50]>> The number of people who didn't own it in their personal account was vanishingly few.

[00:01:55]Now, I subsequently asked them how many own it in their client accounts cuz these are advisors who manage money for other people. It was only about 20 30% of the room. That's still pretty good.

[00:02:06]It's still pretty good.

[00:02:08]Um I'll share two things. You know, first of all, I've been going to this conference for years. Uh 2 years ago, no one raised their hands. Like no one owned crypto. Now they all do.

[00:02:17]The other thing we know from from working at Bitwise for 8 years is that advisors allocating in their personal accounts is the immediate precedent to them doing it for clients. They want to touch it first >> [music] >> before they do it for clients.

[00:02:31]I share that because I think crypto is really gone mainstream. It's crossed the chasm.

[00:02:36]It's no longer this crazy idea. When you have 150 advisors in a room out of 170 saying they own it, when you have Charles Schwab posting videos on X saying maybe between 2 and 7% of your portfolio, Yeah.

[00:02:51]when you have Morgan Stanley launching their own Bitcoin ETF with their name on it, something that they've done very rarely in the past, look, I think the wave of institutional capital that's going to come into the space is going to be extraordinary. And based on what I'm seeing in the field, it's really starting to accelerate. I think that's one of the reasons we've recovered from where we were in February to today. Is this there's you know, there's like that buy like this buy the dip mentality that's always been correct in equity markets for not always, I should say, you know, for many years. And so, if you look at, you know, the flows in VOO or QQQ, which are the largest ETFs in the world, right? S&P 500 and Nasdaq, the days when markets go down are often the times when they see the largest net creations because people are buying the dip.

[00:03:40]Is that is And now that that I I feels like it's that's happening to a degree with Bitcoin. Are we seeing that same kind of investor behavior now replicated cuz it's a similar kind of investor? Is that a signal, in other words, that that kind of gone mainstream to that more DIY, um, you know, market investor? I think that's absolutely right. Yes, I think we are seeing that. I also think a lot of those advisors have studied Bitcoin's history and known that it's historically gone through these big cycles. And if you buy at the bottom of the cycle, that's historically done very well, right? Those who bought in the aftermath of the FTX collapse, uh, did extraordinarily well. Uh, those who bought at the depths of COVID where Bitcoin wicked down to $5,000, right when that COVID pandemic started, did extraordinarily well. And so, I think you have the natural dip buyers and also the Bitcoin dip buyers who have studied this asset but weren't able to invest cuz there weren't ETFs. They weren't available on their platforms.

[00:04:41]Now they can invest and the market was down 50% from its all-time highs. That's a pretty attractive entry point. So, I think I think you'll continue to see that throughout the year. That doesn't guarantee Bitcoin goes up, but it does mean these people see this as an opportunity if they're going to hold this asset for multiple years to get in at a pretty attractive entry point.

[00:05:01]>> Why do you think there's a disconnect, or do you agree with the premise that there is a disconnect between fundamentals and price? And then what why do you think that is?

[00:05:08]Yeah, I think it's actually one of the few occasions in crypto's history where the fundamentals have been ahead of the price.

[00:05:14]Uh, often in crypto, >> That's a very, very good point. Yeah, we hype things so much that the price ahead of the fundamentals. So, it's actually really really nice to see. Um, yeah, I think there are multiple explanations for it. There's never just one. Uh, one is that this is just a natural cascade.

[00:05:32]Most of us in crypto came in through Bitcoin, and then it took us a while to learn about Ethereum and DeFi and other assets. Yep. And I think that story is just repeating. Right? So, if if people started coming into this market new when the ETFs launched 2 years ago, they're just on this journey where they learn about these other assets, just like all of us did. It's just we forget that we went through that journey. So, I think that's that's fairly standard. The other one was one you hinted at, which is that crypto hasn't done a good job until recently explaining why these platforms have a lot of value, right? We didn't really settle on this stablecoin and tokenization use case for things like Ethereum. We had all these weird words that were hard for people to understand, like the world world computer. Um which I don't even know really what a world computer means. It does It like sounds like the cloud. It's like a little confusing. So, I think we've just arrived at this narrative.

[00:06:30]For what it's worth, Bitcoin suffered the same thing, right? Remember it was peer-to-peer cash payments. That was the meta in the beginning, and it didn't really hit the institutional community until we came onto this digital gold thesis, the store of value thesis. I think Ethereum it's a lot on our getting there, but as an investor, I love the opportunity >> [music] >> to find these entry prices given the growth we've seen in fundamentals. I mean, just last week um Meta announced it's going to start paying creators using stablecoins over the Solana and Polygon blockchains.

[00:07:02]Yeah. That's a massive potential piece of news. Mhm. Solana and Polygon didn't budge, right? Um when when the market ignores really big news, that can be opportunity for investors. What I love to do is talk to financial professionals about crypto. I still think there's a huge amount of alpha in this market. I think people haven't recognized how important it it will be in the future, and the more people I can help bring up to speed on that, the better off I'll feel. Hougan also gives a fascinating overview of what Bitwise is building, and it reveals where sophisticated investors think the market is heading.

[00:07:41]Bitwise started with simple crypto index funds. The idea was straightforward.

[00:07:46]Instead of trying to predict which crypto asset wins, why not own the entire ecosystem? Very similar to how investors buy S&P 500 index funds rather than picking individual stocks.

[00:07:57]But over time, Bitwise expanded into much more advanced strategies, single asset ETFs, income generating strategies, staking services, on-chain asset management, crypto equities. And one particularly interesting concept Hougan discusses is vaults. A vault is essentially an on-chain version of asset management. Investors contribute capital into blockchain-based smart contracts that automatically allocate funds into different opportunities seeking yield or returns. In traditional finance, asset managers handle this process manually.

[00:08:31]There was a big piece of news that is being treated as mostly positive for crypto and by the banking lobby as a little underwhelming.

[00:08:40]So, do you want to talk about that?

[00:08:42]Yeah, that's absolutely right. Um, so the question is whether if you hold a stable coin, which is just a digital dollar on the blockchain, can you gain interest on it the same way you do as if you hold a dollar in your bank account?

[00:08:55]Now, we'll ignore for the fact for the moment that most US bank accounts actually don't pay interest. But theoretically, the idea was uh could you have a stable coin that would earn interest? Because the stable coin, of course, is backed by a US Treasury instrument, which pays the risk-free rate, let's call it 4%.

[00:09:11]>> [music] >> Can that 4% flow down to the individual holding a stable coin?

[00:09:15]The uh banking lobby flipped out about this because if you had a choice between having a checking account that pays low interest and has high fees and has some element of risk cuz banks can go under or a stable coin that is backed by a US Treasury instrument that pays 4% interest, the banking lobby was worried that everyone was going to favor the stable coins, particularly during periods of stress when you have bank failures in the US and companies going under.

[00:09:42]So, they they tried to hobble that in this clarity act by making it very difficult for that interest to flow downhill to the end investor. Now, to me, that's anti-consumer. It's my money, I should earn interest. But, the banks wanted to restrict that because they wanted to protect their competitive advantage.

[00:10:00]But, the breakthrough was yesterday was sort of a complex one foot in, one foot out which said that you can't earn interest just for having stable coins sit in an account.

[00:10:15]But, if you do something with those stable coins, if you spend them, if you stake them, if you take an activity with them, then you can earn interest or income on that. So, in the same way that we earn points when we spend with a credit card on an airline, if you spend with stable coins, maybe you can earn some version of interest.

[00:10:37]I think it's um woolly enough language that it will allow significant growth for stable coins to provide this kind of yield. I think that's why you're seeing Circle, which is the largest stable coin issuer in the US, uh react positively to the news because it's seen as a growth catalyst for this market. So, I'll count it as like a 60/40 win for crypto. Yeah.

[00:11:00]And uh and feel pretty good about it. If you're a TradFi investor thinking about investing in this space, and you're worried that the regulations might shift 180 in 2 years, [music] how much are you going to invest?

[00:11:12]Right? Once we have that stability of having legislation, which is very hard to undo, that's when you'll see the sort of flood of investment because that's when the banks will feel comfortable that the the rules on the field won't shift. Um so, I do think it's a it's if we can get this bill passed through Congress, which remember, it's Washington DC, so anything could happen.

[00:11:34]Yeah. [clears throat] Uh you should you should err on the side of expecting sort of incompetence. Um but if it can get past, I think uh I think it will be a major catalyst for crypto. I think it will sort of uh help set off a very strong second half of the year. Tell us about the business, right? You've got 15 billion over 15 billion of assets, but 50 different products. Is that different strategies, different single asset products, active, passive, like, you know, indexed, you know, tell tell us.

[00:12:01]Tell us more.

[00:12:02]>> Yeah, it's all of it.

[00:12:04]Um so, the Bitwise journey started in 2017. We launched the first crypto index fund. Yeah. And the thesis there was pretty simple, which is it's hard to know which of these assets will win over time. I bet people want to just buy them all in an index fund, the same way we buy all the stocks in the S&P 500 or all the bonds in the Bloomberg Aggregate.

[00:12:24]And that fund today is the largest index fund in the world. It's about a billion dollars. It's gone from being a private fund, which was only available to accredited investors, all the way to being an ETP. So, it's much more accessible now. But beyond that, we've launched a large number of single asset ETPs, both in the US and in Europe, because there are investors who want exposure to Bitcoin or want exposure to Avalanche or want exposure to Chainlink or Ethereum. We have the largest Solana ETF in the world. Um and that's a big business for us.

[00:12:56]We found also that many of those investors who meet us in the ETF space want other things as well. So, we have a large business doing SMAs, where we write call options against people's crypto positions to generate income.

[00:13:10]That's a very growing business. We're one of the largest staking providers in the world. We've moved into vaults, which is sort of on-chain asset management. You're going to see us do a more The goal is to be a global crypto asset manager serving all different geographies and to meet people where they are. If that means simple ETFs, great. If it means complex derivative strategies, great. If it means something on chain, fantastic.

[00:13:38]You know, you you think about iconic specialist asset managers like PIMCO.

[00:13:43]PIMCO serves the fixed income market, does it a tremendous job there, and people trust it as experts. Or you think about Blackstone, right? Or you think about uh even BlackRock. Uh But you think about these asset managers that are experts in their space. Bitwise is trying to be expert in the space of crypto, across public private funds, staking on chain, TradFi, uh crypto rails. Um and that's what we try to do.

[00:14:08]There are 200 of us globally, and um the business has been growing nicely over the years. Look, we're big fans of the crypto equity space. We've had a crypto equity ETF, BITQ, since 2021, and investors love that ETF. It's done It's done well recently.

[00:14:25]My view is that No, look, I'm a I'm a old Jack Bogle investor. Um I just want to own the market. So, owning the market in crypto means owning crypto assets and crypto equities.

[00:14:37]When we talk to advisors, there are some that favor one more than other, but more than that, we see people combining them both. Because if you take something like stablecoins, uh and you think stablecoins are going to be huge, right? People say, "We're going to go from 300 billion to 4 trillion dollars in assets in the next 4 years." That's the bullish scenario in Citi Group's stablecoin report. That's like 13x growth. That's massive. Where will that benefit flow through to? Will it go to Ethereum and Solana, which are the two platforms on which those trade?

[00:15:08]Will it go to DeFi assets, which people can use stablecoins on, so protocols like like Aave?

[00:15:15]Will it go to companies like Circle that are building stablecoins?

[00:15:19]>> [music] >> Will it go to firms like PayPal that are experimenting with stable coins.

[00:15:25]Uh the answer is it's hard to know. So, one way to play 13x growth is to make sure you have exposure to all of those things. And that's that's what I hear a lot of investors telling us that they want to own both the equities and the assets uh because they want to own the space as a starting point. So, I look specifically over the passive products and then I'm on the risk committee on the active side. Active has to be your complete 100% job and I do a lot of things. Uh I do a lot of public speaking. So, we have an active team that looks after that. But I helped design the indexes and contribute to the product development and and help manage the risk of the business. I also look after our research team uh because a lot of what we do at Bitwise is educate people on crypto, right? There's not much uh CIO action in our Bitcoin ETF. We just buy Bitcoin. That's not that hard. Um you know, uh but but there is a lot of activity in educating people about Bitcoin. So, that's the other aspect of my job. But it's a it's a fantastic position. I'm I'm blessed to do it and I I love it every day.

[00:16:29]That's great, Matt. So, you mentioned a couple things earlier, SMAs and vaults.

[00:16:34]So, can we unpack those two things for our listeners? What are What are I mean, I think >> Yeah.

[00:16:40]So, what What is an SMA and what's a vault? An SMA is just uh just means separately managed account. Typically, this is an investor who has a large position in Bitcoin, Ethereum, and Solana and they want to maintain that position, but they'd like to generate either yield in terms of dollars or yield in terms of incremental more Bitcoin or incremental more ETH on top of that position. And so, we'll have an individual account with that investor. We have uh a gentleman named Gordon Grant who actually has traded more crypto derivatives than any human on Earth. Um and he manages those positions for those investors and that's a that's a pretty significant business for us.

[00:17:20]Vault is a really exciting corner of the crypto market. If you think Alex what an asset manager does in the traditional world, we take investor money, we custody it, we audit it, we allocate it into the market, we send reporting, etc. In the on-chain world, that role is more or less occupied by a vault. What happens with a vault is an investor will contribute money typically through stable coins to a smart contract. That smart contract will allocate that money into different investments searching out yield or other opportunities. And the vault curator, that's the word, manages the risk in that market and determines which where those moneys flow and make sure that the positions it's going into are not subject to any any idiosyncratic risk.

[00:18:08]So, a vault manager or a curator is not the same as an asset manager in the on-chain world, but it's a similar activity. It's sort of the IP. And I think those are going to be a massive business. If you think the world is moving on-chain, which I do, then you think asset management and vault curation almost become synonymous over time. And so, that's that's the role that we're playing in that space.

[00:18:31]Yeah, a vault is almost like an on-chain SMA of sorts. Exactly. Yeah, well said.

[00:18:37]That's exactly right.

[00:18:37]>> Yeah. And and yeah, you're right. Like if it's a it's such an interesting thing, you know, you mentioned uh public versus private, on-chain versus off-chain. And these are all different categories today.

[00:18:51]But I think in the same way that a a traditional investor looks at private market assets now not as a little sliver to be maybe considered, but rather as like core to a portfolio construction, they may also think because and there's lots of fundamental business reasons for that. You know, there are fewer public companies, companies stay private longer, uh um you know, private credit is a growing category that's not available in the public market and so forth. But also, in the same way that private like I wonder almost if on-chain is where private markets were 20 years ago. Meaning like a or 30 years ago. Sort of this kind of small thing where this community's done really well, there's products available, but it hasn't hit the mainstream. And we might be talking about off-chain on-chain in 20 years the same way that that allocators today talk about public private. It's such a great comparison um because when you think public private, they're both opportunities for capital returns. They have different risks, uh different liquidity, different challenges. But now that they're easier to access, investors can toggle between them. If you look at on-chain sort of vaults, the biggest growth area there is searching for yield. Well, isn't it nice if you're an investor, you could go buy a money market fund and get a yield of X, or you could look at the on-chain equivalent of that that might have a yield of Y. And sometimes one will be more attractive than the other, but I think people will toggle between them the same way they toggle between public and private equity. There's no reason if you can underwrite the risk in on-chain asset management that you might not find those yields more attractive sometimes than you will traditional, and vice versa, right? There are certainly moments where we think the traditional market yields are more attractive than the on-chain yields. And slowly over time those will sort of merge together and and really really become one. So, here's the big takeaway from Matt Hougan's insights.

[00:20:52]The crypto market may still feel early, but the behavior of institutional investors suggests we are entering a completely different phase of adoption.

[00:21:01]The people managing wealth on Wall Street are no longer asking whether crypto belongs in portfolios. Many are now trying to figure out how much exposure they need before the next wave arrives.

[00:21:13]And if Hougan is right, stablecoins, tokenization, Bitcoin ETFs, and on-chain finance may only be the beginning. The real transformation could be much larger than most people realize today.

[00:21:27]If you enjoyed this breakdown and want more deep dives into crypto, markets, institutional investing, and the future of finance, make sure to subscribe and turn on notifications.