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

Guest: Matt Hougan, Chief Investment Officer (CIO) at Bitwise Asset Management
Host: John Gillen, The Milk Road Show
Podcast Source: Milk Road
Headline: Matt Hougan: Crypto Is Down 50%… Wall Street Is ALL-IN
Air Date: Recorded on August 12, 2026, and uploaded on August 13
Compiled by: Deep Tide TechFlow
Original Link: https://www.techflowpost.com/article/33337
Statement: This article is reposted content. Readers can get more information through the original link. If the author has any objections to the reposting format, please contact us and we will make modifications according to the author's requests. Reposting is only for information sharing and does not constitute any investment advice, nor does it represent the views or positions of Wu Shuo.
Disclosure: Matt Hougan is the Chief Investment Officer of Bitwise Asset Management. Bitwise manages more than $15 billion in crypto assets. Its products cover BTC/ETH/SOL spot ETFs, on-chain vaults, active strategies, and more. The show discusses specific assets and recommendations such as the 5% crypto allocation, the $8,000 ETH target price, Hyperliquid, Ondo, Chainlink, Solana, Aave, Uniswap, etc.—Bitwise has product lines or research coverage for these. Hougan explicitly says in the show that “100% YOLO for my business would be better,” but he still recommends a 5% allocation. Readers should evaluate his views based on this stance.
Key takeaways
Matt Hougan is Bitwise’s Chief Investment Officer. He’s a former CEO of ETF.com. He sold that company to FactSet, Informa, and BATS Global Markets in three transactions. He is a co-author of the CFA Institute’s two monographs on ETFs and crypto assets, and has been selected for the Barron’s ETF Roundtable three times. In other words, he’s one of the people who helped build the ETF industry from scratch, and now he’s on the crypto side—not a KOL.
The biggest contrast in this episode is in the title: crypto is down 50% from its highs, but Hougan says Wall Street is actually ALL-IN. This isn’t a slogan. He provides specific evidence: the week the Senate delayed the CLARITY Act vote, BlackRock instead announced two tokenized fund launches on chains like Ethereum. People at the biggest wealth management platforms—Wells Fargo, UBS, Stifel—told him they don’t care about short-term prices; they’re treating crypto as an asset class that will take shape over the next 10 years. When the market fell, Morgan Stanley approved a Solana ETF—not because of FOMO, but exactly the opposite.
Hougan’s two most important calls: first, BTC is no longer caring about bad news—when the AI bubble bursts and liquidations hit, when Saylor sells BTC, when the probability of the CLARITY Act drops from 40% to 14%, BTC rebounds. “The ones that should sell have sold; everyone else believes it will reach one million.” Second, a 0% crypto allocation isn’t neutral—it’s extremely bearish. The global stock market is $110 trillion; crypto is $2.5 trillion. A neutral weight should be about 2%. If you’re at zero, you’re making an active bearish call. 
Great insights summary
About the CLARITY Act and regulation
“This bill will never die. Maybe it will also never pass. It will just keep living in a ‘half-dead, half-alive’ state.” “Crypto won’t wait for it. BlackRock will announce tokenized funds on-chain on the week when the Senate delays it.” “Anti-crypto people are a dying breed. When BlackRock, Nasdaq, NYSE, JPMorgan, and Standard Chartered are all behind it, nobody can put this back in the bottle.”
About BTC price action
“Bear markets die from apathy. You know a bear market is dead when the market no longer reacts to bad news.” “The people who should sell have already sold. The ones left believe this coin will reach one million. They don’t care whether the AI bubble pops.” “A period of BTC moving sideways is a good thing. Volatility is being suppressed, and when it releases to the upside it will happen quickly.”
About DCA vs buying all at once
“Jan VanEck and Matthew Siegel are both right. DCA is behavioral insurance—it helps you avoid panic-selling and then chasing. But from an absolute return perspective, Jan is right—BTC could break upward pretty soon.” “If you truly believe this coin will hit one million, why bet only $5,000? Buy $5,000 in 2018, buy $3,500 in 2019, buy $63,000 now—everything ended up working out well.”
About the October bottom consensus
“I hear three or four people every day saying the bottom will be in October, and that makes me nervous. Once a consensus forms, it usually doesn’t happen like that.” “The calendar really is a reliable indicator of BTC returns. It could dip into the $50K range. But I’m looking for higher by year-end. The upside potential is much bigger than the downside.”
About institutional developments
“The boats at Wells Fargo, UBS, Stifel—they’ve already started to turn slowly. They don’t care about short-term prices; they’re treating crypto as an asset class that will take shape over the next 10 years.” “Morgan Stanley is criticizing Solana ETFs not because of FOMO. Quite the opposite—they approve them when the market is down.”
About the 5% allocation
“5% is a magic number. Below 5%, you get almost a free lunch: returns increase significantly, while portfolio volatility stays almost unchanged.” “Above 5%, returns keep rising, but volatility starts to climb sharply too.” “0% isn’t neutral—it’s extremely bearish. The global stock market is $110 trillion; crypto is $2.5 trillion. Neutral should be around 2%. If you hold zero, you’re making an active bearish call.”
Body
1. The CLARITY Act didn’t pass, but crypto won’t wait
Host John Gillen: In your recent CIO memo, you wrote that even if the CLARITY Act doesn’t pass, it won’t really die—and crypto will keep moving forward. Can you expand on that?
Matt Hougan said when he wrote that memo, everyone expected there would be a final outcome on August 5th or 7th, because Congress was scheduled to be in recess and people had circled the dates for months. But as the dates got closer, he realized this is not how Washington works. Sure enough, as the recess approached, senators started floating “let’s talk about it in September” and “let’s talk about it in the lame-duck period.” His assessment prepared for clients was that what was supposed to be a decisive moment turned out to be a dud. And that’s what happened: there was no vote before the August recess. Then, at the last moment, a senator requested a potential vote in September, so the matter kept dripping out into the future.
Hougan’s core view: This bill will never die—maybe it also will never pass. It will keep living in a “half-dead, half-alive” state. He also said he could be wrong: if political pressure is sufficient, it could pass before the election. But his base case is that by the end of this year, the CLARITY Act will still be in a “half-dead, half-alive” state.
Another judgment is also playing out: crypto won’t wait for it. Wall Street will keep pushing tokenization, and people will keep pushing stablecoins. Hougan emphasizes that crypto itself will keep building.
Host added: He previously interviewed Rebecca Rettig, the Chief Legal Officer of Certa Labs, and she said “Washington’s bill will die nine times before it’s finally passed.” Rettig previously worked on Capitol Hill. Hougan said he hasn’t fully given up hope yet.
2. 24/7 stock trading and tokenization: BlackRock doesn’t wait for regulation
Host: An hour ago you tweeted that “24/7 stock trading will happen at a bigger, faster pace than most people expect.” Is that about the SEC moving forward with innovation exemptions that enable tokenized stock trading? Why are you so optimistic?
Hougan’s logic is simple: financial institutions love making money. Trading stocks 24/7/365 earns more than trading from 9:30 to 4:00 five days a week. And the 8 billion people worldwide can buy more profitably than the few hundred million in the U.S. So they’ll do it. That’s why you see all these tokenization projects and all these companies talking about it on earnings calls. The limiting factor has always been regulation. If the SEC truly issues rules that move tokenized trading “from here to there,” Wall Street will rush through that door.
Hougan mentioned a contrast: the tokenization market is unbelievably small right now. On-chain assets are $300 billion; tokenized stocks are only a few hundred million. The global stock market is $110 trillion. It’s off by a few hundred times. Later, Hougan said that $110 trillion number is already outdated, and after the bull market it could be $125 trillion. Total global assets are $670 trillion.
Host added an additional piece of evidence: the week when the Senate delayed the CLARITY Act vote by a full month, BlackRock announced the launch of two tokenized funds on chains like Ethereum instead. Hougan’s view is: this is the Uber/Airbnb playbook. Consumers and companies move ahead of regulation because the demand is obvious—they think they can do it compliantly. Regulation will eventually catch up. BlackRock is doing this because they believe they can comply. They know the demand is on the other side. They know the world is moving toward tokenizing all assets, and they want to keep being the world’s biggest asset manager in that world—just like in the current world of paper certificates.
3. Anti-crypto people are a dying breed
Host: This battle over the CLARITY Act makes it sound like the anti-crypto crowd isn’t fully dead yet. Some people are publicly celebrating that the CLARITY Act didn’t pass. Is this regulatory risk still there?
Hougan: Risk is always there. You never know whether extreme political factions will regain power. But when what’s pushing this isn’t just crypto—also BlackRock, Nasdaq, NYSE, JPMorgan, Standard Chartered—then it’s very hard to put back in the bottle.
He admits that some corners will be challenging: developer liability is one area with uncertainty. But “the big direction of moving assets on-chain” can’t be taken back by the anti-crypto crowd. He says these people are a dying breed.
The host added one more comment from a report Standard Chartered released this week: it forecasts $4 trillion in on-chain tokenized assets by 2030, and also gave a $200 target price for Chainlink. Hougan said if regulation is in place, Standard Chartered’s numbers could be conservative. Once these things start snowballing, they move very fast. The world is big—$67 trillion in global assets; 4% is more than $2.4 trillion, and currently on-chain is still less than 1%.
Hougan’s most counterintuitive take: tokenized RWA is so small right now precisely because reluctant regulators have suppressed it for many years. Once they loosen up, pent-up demand will snap into action.
4. BTC moving sideways is a good thing: bear markets die from apathy
Host: BTC has been moving sideways for the past few weeks—what do you think?
Hougan’s unexpected answer: “Bear markets die in apathy. You know a bear market is dead when the market stops reacting to bad news.”
He listed recent bad news: AI stock volatility (momentum-compression trades triggered by Situational Awareness liquidations), Saylor selling large amounts of BTC, and the probability of the CLARITY Act dropping from 40% to 14%. BTC, however, went up.
Hougan’s explanation: the people who should sell have already sold. The rest believe this coin will reach one million. They’re the ones who don’t care whether the AI bubble pops. That’s ultimately good for BTC. Hougan feels reassured about BTC moving sideways, not worried about it.
5. DCA vs Buy Now, consensus on the October bottom
Host: I interviewed VanEck’s Jan VanEck and Matthew Siegel. Jan said, “Don’t get fancy—start building your position now.” Matthew said, “Get in with DCA now through Q4.” What do you think? How is Bitwise doing it?
Hougan: The two of them are both right. Matthew is about it on a behavioral level. One of the biggest risks of crypto is behavioral risk: you buy in, it drops 15%, you panic-sell, and then you chase when it hits a new high. DCA is behavioral insurance: this month you buy 10%; next month it drops, and you’re actually happy to buy another 10%. If you believe it will go up, DCA gives you a mechanism to fight panic.
But from an absolute return perspective, Jan. Hougan believes BTC volatility has been suppressed and when it releases upward it will happen quickly. If you’re seeking absolute returns, you should be fully allocated right now.
The host added more context on the October bottom consensus: he’s heard many people say BTC will bottom in October, and that makes him nervous because once a consensus forms, it often doesn’t happen that way. Hougan admits this consensus is strong—he hears three or four people saying it every day, and that also makes him nervous. But BTC’s calendar-based returns have always been a reliable indicator, and he can’t really argue against that. The consensus could fall into the $50K range. But if you believe it will reach one million, why bet only those $5,000? Buy $5,000 in 2018, buy $3,500 in 2019, buy $63,000 now—everything turned out fine in the end.
Hougan’s view: bullish by year-end. The path in between depends on many factors, but the upside potential is much bigger than the downside.
6. Institutional developments: Wells Fargo, UBS, and Morgan Stanley are all turning
Host: What have you been talking with your clients about lately? Are they worried about the CLARITY Act, quantum risk, or Jim Cramer selling bags?
Hougan said he’s been talking a lot over the past month with people from the world’s largest wealth management platforms—Wells Fargo, UBS, Stifel, and so on. The biggest surprise was that their ships have already started to turn slowly. They don’t care about short-term prices. They’re treating crypto as an asset class that will take shape over the next 10 years. When bear markets happen, they know it too—these people are smart—but they understand this is part of an asset class.
Hougan gave a concrete example: when the market fell, Morgan Stanley approved a Solana ETF. Not because of FOMO—quite the opposite.
7. On-chain asset management and ETH $8,000
Host: What do you think about on-chain vaults and asset management? Which assets benefit the most?
Hougan said Bitwise’s own vault business has grown significantly this year, despite uncertainty in the crypto market. He believes on-chain asset management will be huge; vaults are one primitive in it, but not the only one. Other forms of on-chain asset management will emerge within 3 to 6 months. Capital will flow in two directions: first, income-generating strategies (like funding rate arb), where on-chain assets provide unique income opportunities that off-chain assets can’t; second, tokenized stock portfolios, which are more flexible on-chain than traditional shells. And there are on-chain-only things too: perps, pre-IPO stocks, and so on.
The host asked about institutions’ interest in altcoins. Hougan said there are two areas: first, stablecoins and tokenization themes. Institutions are looking for exposure to these themes. Circle, Securitize, and Robinhood are the traditional answers, but the on-chain answers are Ethereum, Solana, Chainlink, and Ondo. Hougan said: these institutional investors haven’t heard of Ondo, but they’re asking what it is. Second, real revenues. Hyperliquid is the most obvious example. But the entire crypto stack has real-revenue projects.
Host mentioned ETH. Hougan’s bull case for ETH: the total amount of on-chain assets will grow 10 to 100 times. ETH leads in market share for tokenization and stablecoins. Two problems for ETH: can it continue absorbing on-chain assets? Hougan thinks it will (the Lindy effect: trust, brand, time). And how to convert market share into value: the community focuses on “the value of ETH as a money asset.” Hougan finds it interesting but says it’s not fully established yet. His ETH price target is $8,000 (Bitwise official forecast).
8. 5% is a free lunch; 0% is an active bearish bet
Host: Bitwise recommends a 5% crypto allocation. Where does this number come from?
Hougan: 5% is the magic number. Below 5%, adding crypto to a portfolio can significantly improve returns, but the portfolio’s overall volatility is almost unchanged. Still, stocks drive portfolio volatility—you get what financial literature calls a “free lunch”: diversified returns and upside potential, with almost no added risk. Above 5%, returns keep rising, but volatility starts to increase sharply as well.
Host adds: Other asset managers have recommended even higher allocations. Hougan joked, “100% YOLO toward my business would be better for me—but we’re doing responsible work.”
Hougan’s most counterintuitive take: 0% is extremely bearish. The global stock market is $110 trillion; crypto is $2.5 trillion. If you use a neutral weighting, it should be around 2%. 5% is mildly bullish, and 0% is extremely bearish. If you have zero allocation, you’re actually making an active bearish call. You’re off the market.
Host closing: At this point in time, holding zero crypto is a huge risk.