Key Takeaways

• The current crypto winter may be ending, signaling a potential market recovery.
• Bitcoin’s recent performance aligns with the ongoing crypto winter since January 2025.
• Institutional investments have masked the true state of the broader crypto market.
• The disparity between Bitcoin and altcoins highlights the uneven impact of the crypto winter.
• Institutional flows have prevented a more significant decline in Bitcoin prices.
• Retail investor exhaustion could be a catalyst for market recovery.
• Fear and selling pressure are indicators of a market bottom.
• Institutional interest remains strong, viewing the current market as an opportunity.
• The market is likely nearing a bottom, with a bullish trend potentially ahead.
• Historical patterns during crypto winters are often overlooked in negative narratives.
• The future of crypto looks promising with expected growth over the next decade.
• The Clarity Act’s passage could catalyze a bull market for crypto.
• Political dynamics, not technical aspects, are the major sticking points in crypto regulation.
• The stablecoin debate’s polarization indicates their growing importance in finance.

Guest intro

Matt Hougan serves as Chief Investment Officer at Bitwise Asset Management. He has forecasted that crypto equities, such as Coinbase, are poised to outperform broader equities in 2026 amid growing Wall Street trust. Hougan argues the crypto market is nearing the end of a hidden bear phase, with Bitcoin’s institutional flows masking underlying stress from weakening retail participation and struggling altcoins.

The end of the crypto winter

• “The current crypto winter may be coming to an end, suggesting a potential recovery in the market.” – Matt Hougan
• Bitcoin’s performance can be understood by recognizing the ongoing crypto winter since January 2025.
• “We’ve been in crypto winter since January… you can see that there are really three groups that top group is bitcoin eth and xrp.” – Matt Hougan
• The broader crypto market has been in a deep winter since January 2025, despite Bitcoin’s stability.
• “The average winner lasts about thirteen months… I think we’re closer to the end than the beginning.” – Matt Hougan
• Institutional investments have masked the true state of the crypto market.
• “Institutions were still in this summer haze but the rest of crypto was in this dark deep winter.” – Matt Hougan
• The disparity between Bitcoin and altcoins highlights the uneven impact of the crypto winter.

Institutional influence on Bitcoin prices

• Institutional flows have been crucial in preventing a larger decline in Bitcoin prices.
• “If we didn’t have ETFs so we didn’t have debts and we didn’t have $75,000,000,000 flow into bitcoin last year from institutions, the price would have been down 50 or it would have been down 60.” – Matt Hougan
• Retail investor exhaustion could be a catalyst for market recovery.
• “Winters die in exhaustion… this is sort of classic 2018 classic 2022 style winter and that is what you need to look for for the catalyst to recover.” – Matt Hougan
• Fear and selling pressure are indicators of a market bottom.
• “When you see the fear and greed index set yet another low it makes you more bullish when you see leverage squeezing out of the system and people just folding it in and going to other things those are actually the signals that were closer to a bottom.” – Matt Hougan
• Institutional interest remains strong, viewing the current market as an opportunity.
• “The institutional interest is still strong and still there… they are staring at opportunity… most people were starting at zero and wanting to allocate.” – Matt Hougan

Market sentiment and potential recovery

• The market is likely nearing a bottom, with a bullish trend potentially ahead.
• “I think they’re closer to the end than they are the beginning… I’m starting to feel bullish for the first time in a few… I hope it goes down way further because I wanna buy more.” – Matt Hougan
• Negative narratives about Bitcoin often overlook historical patterns during crypto winters.
• “The thing about those things that are negative on bitcoin… this is perfectly normal… this is what happens in crypto winner and the people who step into it have historically been rewarded.” – Matt Hougan
• The future of crypto looks promising with expected growth over the next decade.
• “I think we’re in a ten year grind a painful grind higher but all the long term trends are really good… when all assets are tokenized… when stablecoins are multiple trillions of dollars… that’s like a pretty good story for where crypto is.” – Matt Hougan
• The crypto industry needs to demonstrate its value to ensure it becomes too big to fail.
• “We have three years… to make this industry too big to fail… it would be like a systemic risk for it to die.” – Matt Hougan

Regulation and its impact on the market

• The Clarity Act’s passage could catalyze a bull market for crypto.
• “Pathway one is we get a reasonable version of the clarity act passed… that cements the regulatory floor underneath crypto and I think is a catalyst for a bull market.” – Matt Hougan
• Political dynamics, not technical aspects, are the major sticking points in crypto regulation.
• “I think it literally just comes down to ethics… the democrats are not signing something that lets trump be a major part of the crypto industry.” – Matt Hougan
• The outcome of the Clarity Act will depend heavily on the lobbying efforts of the crypto industry.
• “The only hope is that the lobbying weight and dollars of the crypto industry will get enough democrats to hold their nose and pull it over the line.” – Matt Hougan
• The stablecoin debate has become polarized and extreme, with significant implications for the banking system.
• “We really took the stablecoin interest debate to the extremes… if stablecoins pay interest we’ll destroy the modern banking system… if stablecoins do not pay interest china will dominate the globe.” – Matt Hougan

Stablecoins and their growing importance

• The extreme arguments about stablecoins indicate their growing importance in the financial landscape.
• “I think it makes me really bullish on stablecoins that people see them as being so important that they’re making these extreme arguments.” – Matt Hougan
• Coinbase has a competitive advantage due to its current yield offerings.
• “Right now they kinda can’t lose to be honest because they are offering rewards or yield right now which almost nobody else can so they have a competitive advantage with the current structure.” – Matt Hougan
• There is a lack of lobbying for everyday Americans to earn interest on their cash.
• “The terrible thing about stable coins is there’s no lobby for everyday americans or everyday citizens around the world that just wanna generate yield directly on their dollars.” – Matt Hougan
• The lack of regulatory clarity benefits established players like Coinbase.
• “If clarity doesn’t pass there’s a degree of regulatory capture for the largest in the industry… I think coinbase does well in that world.” – Matt Hougan

Institutional adoption and market growth

• The institutional adoption of crypto will lead to significant market growth over time.
• “If you start to see bitcoin be two and a half percent of that portfolio, the flow is blow this out of the water… there is extraordinary interest… it is coming and I don’t think the market pullback… is going to stop that or reverse that.” – Matt Hougan
• The market will experience a slow and steady growth rather than a sudden influx of capital.
• “It’s going to be a grind… I think it’s a ten year grind that ends with bitcoin well north of a million dollars.” – Matt Hougan
• The scale of institutional capital in finance is enormous and will significantly influence crypto markets.
• “The scale of these institutions is just absolutely enormous… 2,000,000,000,000, 5,000,000,000,000, 10,000,000,000,000 for Morgan Stanley.” – Matt Hougan
• Chainlink has over 90% market share in connecting blockchains to the real world.
• “When you start to understand how chainlink actually works and you understand the core problem it’s solving which is essentially the blockchains exist in isolation and need to talk to each other and the real world and they have like 90 plus percent market share of that.” – Matt Hougan

The intersection of crypto and the real world

• The intersection of crypto and the real world will become increasingly significant over the next ten years.
• “The thesis that crypto and the real world will intersect more over the next ten years is probably the most obvious bet in finance.” – Matt Hougan
• Chainlink deserves to be considered among the top assets in crypto due to its real-world applications.
• “I do think it belongs on the mount rushmore crypto… chainlink is central to everything stablecoins and tokenization.” – Matt Hougan
• The complexity of how Chainlink’s value accrues to its token is a broader issue in the crypto space.
• “There’s never been much clarity on how all of what you just described accrues to the token itself and then that’s a that’s a crypto problem in general.” – Matt Hougan
• The alignment between token value and underlying economic activity will improve over time despite current regulatory challenges.
• “You’re already seeing experiments to better align token value and underlying economic activity… I think it will work out over time and the opportunity is just too large to sacrifice it for those challenges that it’s working through.” – Matt Hougan

Regulatory pressures and market dynamics

• Regulatory pressure has forced crypto projects to design their offerings conservatively, limiting economic connections.
• “The important thing to remember about that is they the regulators didn’t tell you what would be over the line… you had to design something that was like in the middle of the field because you didn’t wanna get anywhere close to the edge.” – Matt Hougan
• Market structure is more important than genius in the crypto space.
• “I think it’s way more important than than genius because it answers so many more questions for crypto.” – Matt Hougan
• The profit motive will drive traditional finance to aggressively build in the crypto space despite potential regulatory changes.
• “My guess is that it is for what it’s worth I think the profit motive is big enough for them to want to do that.” – Matt Hougan
• The Clarity Act could potentially ban tokenization.
• “Some of the language says tokenization could be basically banned.” – Matt Hougan

The future of tokenization

• Tokenization of all assets is inevitable within the next five years.
• “I think it’s inevitable in the next five years I think all assets are going to be tokenized which will make the defi industry a 100 times bigger.” – Matt Hougan
• The scale of tokenization is significantly larger than the current stablecoin market.
• “Stablecoins are $300,000,000,000 equity is a $110,000,000,000,000 it’s like 300 plus times bigger.” – Matt Hougan
• The US will ultimately lead in tokenization despite Europe’s current advancements.
• “I’m gonna fade Europe being the regulatory leader on tokenization we’re going to get it right here in the us.” – Matt Hougan
• Assets outside the institutional perimeter will struggle, while those within it will perform well.
• “I don’t think people forget that assets that were are within that perimeter are going to do well assets outside of that perimeter are mostly going to struggle.” – Matt Hougan

Privacy coins and market opportunities

• The movement of Bitcoin into the regulated sphere is creating opportunities for privacy coins.
• “I think you can’t disconnect that from the movement of bitcoin into the regulated sphere… I think there is more space for those assets.” – Matt Hougan
• Monero has a significant and enduring demand in the market.
• “I think there is a part of the world that’s nontrivial that wants that exposure… that is not going away.” – Matt Hougan
• Good news in the crypto market is being ignored but will serve as potential energy for future bull markets.
• “One of my theses… is that good news gets ignored but it gets stored as potential energy for the bull market that eventually comes.” – Matt Hougan