Matt Hougan: Bitcoin Is About To Replay The 2025 Gold Run

Added: 2026-05-31

[00:00:00]But the amazing thing about Bitcoin is you can walk through studies that show that over any three-year period in history, every single three-year period in history, every whatever that is, 1,000 [music] X days, um Bitcoin has improved your risk-adjusted returns, and even a small allocation has [music] done so without increasing your volatility. If you strip Bitcoin of all the emotional baggage and just look at its asset, you want it in your portfolio. Not 30%.

[00:00:28]That's for Yahoos like me. But a handfuls of percent, you can really have a risk I think Bitcoin will get to $1.4 million by 2035.

[00:00:38]>> Bitwise CIO Matt Hougan reveals the current Bitcoin market is setting up for a massive institutional melt-up, similar to gold's parabolic run. Hougan points out that over any three-year period in history, Bitcoin has consistently improved risk-adjusted portfolio returns with zero added volatility. Stripping away the emotional baggage, he argues a modest allocation is just basic diversification, a strategy he believes could fuel a historic supply shock and propel Bitcoin to $1.4 million by 2035.

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[00:01:25]>> Gold went up like 50-60% in a short period of time, uh which is an uh $10 trillion though in terms of actual the asset class, which I think speaks still that that Bitcoin could go on a crazy run.

[00:01:40]>> The thing that people forget about that gold bull run, which took place in the in 2025, right, particularly the second half, is that actually it was at the end of a grind.

[00:01:50]So, the the gold bull market started in 2022, actually when the US uh seized Russia's treasury assets after the start of the Russia-Ukraine war, that caused central bank buying in gold to rise by 150% on reported terms and probably like three or 400% on real terms, cuz a lot of it doesn't get reported, particularly from China.

[00:02:13]Um, [music] and gold went up a little bit in 2022, but then that central bank buying persisted in '23 and gold went up a little bit more, and in '24 and gold went up a little bit more, and then in '25 it persisted again. It didn't increase, it just sat at about one about about 150% above baseline. It sort of sat.

[00:02:36]Uh, but it was only in 2025 that we had that melt up, and that tells you something. What it tells you is that the gold market had residual supply that was willing to sell to central banks, and they sold in '22 and they sold in '23 and they sold in '24, and then in '25 they ran out of gold to sell.

[00:02:52]>> [music] >> And there was a supply shock where the central banks were still buying, but the sellers were exhausted. And that's where you get that parabolic move. I actually think that that will happen in Bitcoin eventually, because you have this institutional demand that's come in and is buying tens of billions of dollars of Bitcoin, and so far people have been willing to sell.

[00:03:12]>> [music] >> And they're still to some degree willing to sell. But I have a view that this institutional bid is going to persist for 5, 10 years. I think it's going to accelerate actually as these platforms uh, get more comfortable around Bitcoin.

[00:03:27]>> [music] >> And so, I actually think it's just a matter of time. I think gold tells the story, which is it's not like demand spiked in 2025. Demand was persistent.

[00:03:36]It's actually that supply ran out of gold to sell, >> [music] >> and I think that will eventually happen in Bitcoin. I do think we'll eventually get to melt up. I don't know when that will happen, >> [music] >> um, but I think it it if we see this persistent institutional demand, I think the story we saw in gold will repeat itself um, in Bitcoin actually.

[00:03:55]>> Do you think the market kind of understands what's happening in Washington right now?

[00:04:01]>> Look, I think it got excited about the initial policy reset. You certainly saw that around the election where we spiked from the 70s to 100k pretty much immediately.

[00:04:11]And like anything, I think it probably overestimated the short-term impact and underestimates the long-term impact.

[00:04:18]Right? So, we're following that traditional uh sort of trough of disillusionment or whatever.

[00:04:25]Um it's really remarkable the degree of change.

[00:04:29]Right? I don't think people who weren't in crypto really reflect on how bad it was. So, the new people entering Bitcoin don't recognize how bad it was during the Gensler era. It was hard for even big companies like Bitwise to get bank accounts. Like imagine that world.

[00:04:46]Uh imagine having millions of dollars and going to a bank and then telling you no, we don't want your money. That was a That was a real lived experience [music] for many crypto firms. And virtually every crypto firm faced uh lawsuits or subpoenas from the SEC. It was just exquisitely toxic. And now, it's extraordinarily accommodative. The SEC is pro-crypto, the OCC is pro-crypto, the CFTC is pro-crypto. We're getting crypto bills passed.

[00:05:12]So, my view is that the market did initially recognize the difference, but it doesn't necessarily understand that Washington takes a long time to change. And we're going to feel the impact of this regulatory shift not over 5 months, but over 5 years.

[00:05:28]>> [music] >> Um but it's it's really a different environment. I can't emphasize in how toxic it was and how uh normal it feels now.

[00:05:38]Um I think it's really important. The other thing I'll say, which is maybe non-obvious to people, is that the improved regulatory environment will make crypto safer.

[00:05:48]And there'll be fewer blow-ups of the life [music] of FTX or the ICO scams that set us back so much in crypto over the years. We're going to have fewer of those because we have an engaged regulator who is willing to work with high-quality actors instead of just pushing everything to unmonitored offshore environments where craziness happens.

[00:06:12]And that means not no blow-ups in crypto. I don't think that will be the case, but fewer of those types of blow-ups in the future than we've had in the past. [music] >> When when you're sitting across from saying advisor who has institutional clients or a family office, they have zero Bitcoin in it.

[00:06:28]What's the conversation and what's the right starting point you recommend?

[00:06:33]>> Yeah, well, there there three ways to get them interested in Bitcoin and you sort of have to figure out who you're talking to because they'll have different views and maybe I'll walk you through those three ways.

[00:06:44]There's one group where you can make just a sort of Jack Bogle argument.

[00:06:48]>> [music] >> Which is to say, look, Bitcoin's a $2 trillion asset, equities are $110 trillion.

[00:06:54]That means you should be about 1.8, 1.9% Bitcoin if you're neutral.

[00:06:59]If you're at zero, you're off market.

[00:07:01]Look, Schwab is talking about 7% Bitcoin, Fidelity's saying 10%. My personal portfolio is like a third. You don't have to do that. Let's just get to neutral.

[00:07:11]If you want to be underweight, maybe you're at 1%. And so there's an audience that really believes in diversification and if you know that that's the type of advisor, that's an angle you can go.

[00:07:21]There's another audience that really loves portfolio construction >> [music] >> and they're into sharp ratios and drawdowns and how to improve the risk-adjusted returns of your portfolio.

[00:07:31]And the amazing thing about Bitcoin is you can walk through studies that show >> [music] >> that over any three-year period in history, every single three-year period in history, every whatever that is a thousand X days.

[00:07:44]Um, Bitcoin is improve your risk-adjusted returns and even a small allocation has done so without increasing your volatility.

[00:07:51]>> [music] >> And that you can you can have a great sort of science-based conversation that says, if you strip Bitcoin of all the emotional baggage and just look at it as an asset, you want it in your portfolio.

[00:08:03]Not 30%.

[00:08:05]That's for Yahoo's like me, but at handfuls of percent, you can really have a risk And then there's the third group where you they're they're very interested in asymmetric returns.

[00:08:15]>> [music] >> And they're looking for things that can really provide upside to the rest of a portfolio that's relatively conservative.

[00:08:21]And there you can walk them through like I love to walk them through why I think Bitcoin will get to 1.4 million dollars by 2035.

[00:08:29]And there's some very facts-based reasons with some very modest assumptions that get you to those kinds of numbers. And so if they're an asymmetric return kind of a group, then you have to target them. Sometimes you pick the wrong lane and you think they're an asymmetric group and they're actually this Jack Bogle style investor.

[00:08:48]But we sort of have different approaches for for each kind of institution [clears throat] and um, usually one of those three things at least opens the aperture to get them to start to consider it. But I have been involved in ETFs since the early 2000s. [music] And at the time, ETFs were this renegade technology. I know today they're the apple pie of investing. You mentioned the 2067 target date fund. They're how everyone invests.

[00:09:12]But in in 2002, 2003, they were the disruptive force that were distrusted by the market. So, people called them EFTs.

[00:09:22]Uh, people called them weapons of mass destruction. There were actually congressional hearings about ETFs destroying the American dream and calls for people to shut them down. They were really disliked by the traditional market. And those of us who loved ETFs looked at them and they were like, "Look, it's a it's a faster, cheaper, more tax-efficient, warfare technology.

[00:09:44]>> [music] >> It's going to win." And so the reason you see this huge overlap between the ETF industry and and the Bitcoin community is because the ETF industry in the early 2000s, right, pre-Bitcoin, saw a disruptive technology that was hated by the mainstream but had fundamental advantages despite all the odds that all the smart people stacked against it just come to dominate and become a 20, 30 trillion-dollar market. So we've seen this disruption before. So when we looked at Bitcoin, this is part of why I felt comfortable leaving ETFs and moving to Bitwise 8 years ago [music] to focus full-time on crypto.

[00:10:22]I had seen something that people disliked, that there were congressional hearings about, that folks like Jamie Dimon were saying would never happen, become not just successful but dominant.

[00:10:33]And I think once you've seen that, you can pattern match. So I do think there are a lot of historical analogs. I know that's hard for people to sort of accept today cuz ETFs are so mainstream. But look, I think if you fast-forward 20 years from now, crypto will be completely mainstream. Most people will own Bitcoin. It will be a huge part of the global economy held and everyone will sort of look back and and chuckle that we had, you know, Charlie Munger comparing it to whatever he compared it to. I I I I think we've seen this journey before. So I was ready to accept Bitcoin's path, I think maybe because of the lessons I learned in ETFs.

[00:11:13]>> According to Hougan, Bitcoin ETFs achieved the most successful launch in ETF history. Not merely the most successful by a small margin, but by an extraordinary multiple. Previous record-setting ETF launches attracted billions of dollars. Bitcoin ETFs attracted many times that amount in their first year alone. This level of demand reveals something important.

[00:11:34]>> [music] >> Investors were not waiting for Bitcoin itself to be invented. They were waiting for a structure through which they could access it comfortably. Financial advisors, family offices, wealth management platforms, and institutional investors already understood ETFs. They already had compliance systems, operational frameworks, and portfolio models built around them.

[00:11:54]>> Why does a ETF make sense for large institutional allocators?

[00:11:59]>> Why did Why did >> ETFs make sense for large institutional people?

[00:12:04]Um there are a bunch of reasons.

[00:12:06]Uh one is that they're really cheap.

[00:12:08]So, you know, our ETF is 20 basis points, 0.2% per year, and that includes custody, tax, audit, trading, reporting.

[00:12:17]You have to be a very large institution [music] managing a very lot of money to get that kind of deal with a custodian, right?

[00:12:26]>> [music] >> Um so, just on a pure cost basis, uh at this point, at these prices, the ETF is often the cheapest way for people to get full institutional [music] quality exposure to Bitcoin. That's a big piece of it. The The second big piece of it is that when you buy Bitcoin, uh whether it's through an ETF or if you did direct institutional custody, you don't just buy it, you own it. And what does that mean? That means that you have to uh continue to do diligence custodians, you have to continue to do diligence audit firms, you have to continue to protect uh the Bitcoin and stay up-to-date with the latest markets, uh if there are developments, like God forbid, another major fork, you know, Bitwise has lived through major forks uh in in in [music] assets before, you have to know how to handle that. And so, I think having an ETF, particularly with a manager who's been in the market for, you know, 8 years or so, um and has lived through these things, gives you a lot of comfort on the owning. So, both [music] both on a cost basis and then on an ongoing management basis, it's easier, uh cheaper, and then it's just it's it's the easiest thing for these institutions to do. They own lots of ETFs. They could just add one more.

[00:13:36]They don't self-custody a lot of assets.

[00:13:38]That's not something that a pension does. So, this is a new muscle they'd have to underwrite and trust.

[00:13:44]>> [music] >> And look, ETFs have won in every market, stocks, bonds, real estate, commodities, etc. It's it's a phenomenally effective wrapper for institutions. So, I'm not surprised that they've been so successful in in in Bitcoin as well. But first, I'll tell you a surprising statistic from ETF history. Which is you know, the gold ETF launched in 2004. And at the time when it launched, everyone was like, "Oh, this is terrible. It kills self-custody of gold." People were worried about it harming the gold bar and coin market. And actually, what the data shows is that the number of people holding physical gold has expanded like 10, 20, 30 X since the ETF launched.

[00:14:26]>> [music] >> Because while many people hold the ETF, it broadened the market of people who are interacting with gold. And so, the number of people who decide to self-custody increased as well. I think that is happening in Bitcoin ETFs as well. Bitcoin ETFs are broadening the market of people who interact with Bitcoin, and some fraction of those will self-custody, and that is great. The thing you're pointing to is something that I um I really am committed to seeing in the ETF space.

[00:14:57]Which is because you can now in kind into and increasingly in kind out of ETFs, uh it's possible for you to take Bitcoin that's held in self-custody today, and we've had clients who do this, >> [music] >> and bring it into an ETF wrapper. There are various reasons to do that. Maybe you want the institutional custody, maybe you want to gift it. That's very hard to do with self-custody Bitcoin, very easy to do with Bitcoin ETF shares.

[00:15:24]Maybe you want to pass it down, that may be easier in an ETF wrapper. But then the other half of that that's really important to me as a as a Bitcoiner is I would love it to be the case that you could in kind out of the ETF if you wanted to self-custody.

[00:15:38]Um we're working on that process.

[00:15:41]Right now, theoretically, you can do it at large dollar amounts. That's the way these things work. Uh when the in-kind started, you really had to be at like a hundred million dollars, which is just out of [music] reach for most people.

[00:15:54]That's come down into maybe the five to ten million dollar range. I would love to drive that down to a dollar.

[00:16:01]And then the same thing on the other side, being able to in kind out. I don't know that we'll be able to get there, but I think we'll be able to get there eventually. That would make ETFs a beautiful part of this ecosystem. They would make it easy to hold if you wanted to in a regulated format, but they would allow you to self-custody. If That That's the long-term uh dream, at least for me.

[00:16:22]First of all, record flows. Uh you know, this is not new news, but the first year of flows, thirty-six billion dollars, was the most successful ETF launch of all time, not by a little, but by a factor of six. That Which is to say, just to because I don't think people recognize how extraordinary this is. In the history of all ETFs, the most successful ETF prior to the Bitcoin ETF raised six billion dollars in its first year.

[00:16:47]And then the ETFs the Bitcoin ETFs did thirty-six billion dollars.

[00:16:52]Uh amongst eight thousand plus ETF launches from firms like BlackRock and Vanguard covering the S&P 500 and international stocks and all bonds, Bitcoin six x'd. Right? It's just extraordinary. So, huge massive inflows.

[00:17:08]The second year inflows were strong.

[00:17:10]>> [music] >> Uh third year inflows I think are going to be very strong because we've just seen in the past, let's say, six months, the ability [music] for folks like uh Merrill Lynch and Morgan Stanley and Wells Fargo and other big platforms to buy the ETFs. So, I think those flows are really going to scale up.

[00:17:28]The the the the buyers that have come in through ETFs that didn't exist before in scale are really financial advisors and family offices and some parts of the institutional stack, particularly hedge funds.

[00:17:44]Uh there are various reasons that those three groups find it easier to do the ETF than they did to buy on like Coinbase or buy direct and self-custody.

[00:17:54]Um ETFs are what they interact with. But that share of the flow, I think will grow over [music] time. It's maybe been about half or maybe 40 or or percent or so. I think it'll eventually be 60 or 70%. Those are the dominant users of ETFs >> [music] >> in most markets and I think will be in crypto.

[00:18:13]>> Gold was the second biggest. It did 3 billion. The the biggest were the Qs, the Nasdaq 100 Qs back in '99. Yep, in the heat of the internet bubble.

[00:18:22]>> Or a very bullish Bitcoin environment.

[00:18:24]Remember, we haven't seen like a 2017 melt-up um in Bitcoin.

[00:18:30]Uh what we've seen is the market has roughly doubled since the Bitcoin ETF launched or gone up 60%, but that's pretty pedestrian returns.

[00:18:39]And, you know, a really interesting thing that we've seen is that not much money that flew out from the October high to the February low.

[00:18:49]Bitcoin retraced 50%. We only had a few billion dollars of outflows. I think that didn't surprise me. Um uh but I think that surprised a lot of people that the the buyers were such diamond hands in these in these ETF markets.

[00:19:03]>> How do you guys feel about competing with BlackRock?

[00:19:06]>> [music] >> Is that, you know, what's sort of your take there?

[00:19:09]>> I love it.

[00:19:10]>> Yeah?

[00:19:10]>> Absolutely love it. So, is it frustrating that Bitwise was in the market for 6 years and then BlackRock came in and swooped up huge amounts of assets? Of course it is.

[00:19:22]But, my firm's assets are up, I think, 10 to 15x [music] since BlackRock came into the market because they widen the pie dramatically. Right? So, they bring so much credibility to the space and they have conversations and we have conversations that we get a piece of that and they get a large piece of that.

[00:19:41]And they're such a high-quality firm that I love competing with them. I know that they win a lot of time cuz they have brand, but they really are growing the pie significantly. The other thing that I think about, you know, one risk to Bitcoin is that we see the pro-crypto regulatory environment in Washington shift to an anti-crypto regulatory environment in a future administration.

[00:20:03]I think the fact that BlackRock is in the market and their most profitable ETF is their Bitcoin ETF reduces the probability of that shift. Right? So, you want high-quality firms that believe in Bitcoin on your side with weight to sort of make sure that we don't swing too far in the event of a future election uh to an anti-crypto moment.

[00:20:26]And so, for that reason, I also really welcome them. So, I love competing with them. I get frustrated sometimes, but uh but we're growing the pie. And so, um they're they're our friends and and uh I'm glad they're in the market.

[00:20:38]>> Matt Hougan's outlook ultimately centers on a simple but powerful idea. Bitcoin is transitioning from an outsider asset to a core component of the global financial system. The process is being driven by institutional demand, regulatory normalization, expanding ETF adoption, and a supply structure that remains fundamentally scarce.

[00:20:59]While short-term volatility will undoubtedly continue, Hougan believes the market is focused on the wrong time frame.

[00:21:06]The real story is not what Bitcoin does over the next few months. The real story is what happens when years of persistent institutional buying collide with a finite supply of available coins.