Bitwise’s Matt Hougan Lays Out Five Forces That Will Drive Crypto’s Next Cycle

Regulation: From headwind to tailwind

On regulation, Hougan said the SEC under current Chair Paul Atkins has dropped the enforcement actions the agency brought against major exchanges during Gary Gensler’s tenure and ended what he described as “debanking” pressure on crypto firms.

Under Gensler, the agency sued nearly every major exchange and treated most crypto assets other than Bitcoin as unregistered securities, pushing firms to debank and entrepreneurs offshore. Atkins’ SEC has dismissed those suits, as well as litigation against Coinbase and Kraken, and his Project Crypto initiative has continued loosening rules around token trading.

For institutions, Hougan argued that regulatory clarity lets firms like BlackRock (NYSE:BLK), Nasdaq, NYSE and DTCC operate in the space, building businesses in crypto markets rather than just allocating to them.

“When that happens, what gets built stops being crypto-specific,” he said.

Hougan pegged the crypto market at roughly US$2 trillion against a global stock market worth over US$150 trillion. “Bringing even a fraction of that onto blockchain rails multiplies the market that platforms like Uniswap or Aave can serve many times over.”

Edelman raised the SEC’s floated plan to let blockchains serve as the official record-keeper for securities, and the London Stock Exchange’s stated intent to move its top 100 stocks on-chain for 24/7 trading as evidence that this shift is not just theoretical.

Further reinforcing the narrative, wealth managers’ capital market assumptions have moved from debating whether to hold any crypto at all to allocations that, according to Hougan, roughly double what many portfolios held a few years ago even at the lowest end.

He pointed to the billions that have poured into Bitcoin and Ethereum ETFs over the past month alone, with hundreds of millions more into funds tied to XRP, Solana, Hyperliquid and Chainlink. Bitwise’s own Bitcoin ETF, (NYSEARCA:BITB), charges a mere 0.20 percent expense ratio.

Institutions favor ETFs specifically, Hougan argued, because crypto custody differs enough from equity custody that most aren't equipped to manage it directly. “That's why you see folks like the Harvard Endowment using an ETF to gain exposure to Bitcoin or the Abu Dhabi Sovereign Wealth Fund using a Bitcoin ETF to gain exposure to crypto.”

A retail investor being able to own the same fund Harvard does adds a level of access, Hougan said doesn’t exist in comparable institutional markets like venture capital.

Money and markets move on-chain

Stablecoins and tokenization are an entirely different mechanism from how money and securities currently move.

In Hougan's telling, both will help drive the next phase of crypto forward. “I think that what the world has woken up to is the fact that blockchains are the best tool for moving financial assets that's ever been created.” Hougan cited stablecoin transfers settling in seconds for a fraction of a cent on Ethereum.

Every major financial firm, from Stripe and Visa (NYSE:V) to the largest banks, is now positioning to build in the stablecoin market, which Citibank has forecast will reach US$4 trillion within four years, according to Hougan. Meanwhile, tokenized stocks, which also settle almost instantly, have been growing 600 to 700 percent annually, and the SEC’s chair has said all stocks could be on-chain within a couple of years.

Recent trading activity also suggests that demand for market access outside regular trading hours is growing: an analysis by The Defiant, using public on-chain data, reveals that trading over the 42 largest tokenized equities traded US$1.01 billion over Labor Day weekend, roughly matching Friday’s US$1.02 billion session while markets were open, with US$398.3 million more added on Labor Day for a US$1.41 billion three-day total during an 89.5-hour NYSE closure.

By platform, Robinhood Chain took 57 percent of the weekend total at US$572.8 million, ahead of Binance’s bStocks (US$303.5 million), Backed Finance’s xStocks (US$87.1 million and Ondo Global Markets US$43.8 million.

Important Caveat: Ownership vs. exposure

The tokenized-equity trend also comes with a caveat investors should understand, and a public dispute between AMC and Robinhood shows exactly what’s at stake for investors.
Last week, AMC CEO Adam Aron demanded Robinhood halt its tokenized AMC products, which are structured as debt securities issued by a Robinhood subsidiary that track AMC’s stock price but confer no ownership stake or shareholder rights in AMC itself. Aron’s objection is similar to one OpenAI raised in 2025 over Robinhood’s tokenized OpenAI shares, a dispute EU regulators looked into but never publicly resolved.

Robinhood’s general counsel rejected the call to desist and told Aron to “send (his) lawyers”. The situation is unfolding, and regulators have not issued a public comment on the matter as of press time. The SEC’s own staff guidance, issued in January 2026, specifically addresses this kind of product, saying tokens that track a security’s value without conferring ownership could qualify as “security-based swaps,” triggering added regulatory requirements.

On September 15, Robinhood CEO Vlad Tenev said on X that "in-kind redemption and voting are coming for Robinhood Stock Tokens," with the company's head of crypto adding that 1:1 redemption is in active development and voting rights are on the roadmap. Neither feature has a launch date or defined eligibility criteria, and Robinhood hasn't said whether AMC token holders specifically will be included.

The takeaway here is that many tokenized-equity products offer price exposure, not the legal ownership that comes with holding the underlying stock, an important nuance that investors must understand.

On-chain finance takes shape

Tokenized stocks, bonds and dollars will also trade against each other directly on protocols like Uniswap rather than through traditional foreign-exchange desks or clearinghouses, a wrinkle Hougan said is why investors are buying into the protocols powering that infrastructure, not just the tokens themselves.

While stock exchanges may be “at risk,” Hougan said they’re not doomed, noting exchanges could be preserved by regulatory requirements or simply adapt. “I think the traditional role of exchanges and broker-dealers will morph dramatically over the next handful of years. So I don't think it will look quite like what it looks today.

“For what it's worth, that's actually already happened. Nasdaq is a data company masquerading as an exchange, and it’s morphed its business over time, and I think you’ll see it do it again.

“Certainly NASDAQ and NYSE and CBOE and others see it coming; some of them will succeed in making the transition, and probably some of them won’t. I think that’s just what happens in these disruptive environments.”

That same pattern, Hougan said, extends well beyond exchanges to all of finance. “We think finance will just be on-chain finance. We don’t think we’ll even call it crypto; we just think all finance will move into these on-chain environments.”

Hyperliquid and Uniswap are already trading entirely on-chain rather than through a centralized institution. Both also earn real revenue from it: trading fees from users swapping tokens, a share of which they now route into buying back their own tokens on the open market, the same logic as a corporate stock buyback: fewer tokens in circulation means each one left represents a larger claim on the protocol’s revenue.

Under past SEC regulations, tokens that generated revenue and bought back tokens risked being treated as unregistered securities offerings, forcing protocols to rely on governance tokens instead. This next stage, said Hougan, will create new opportunities as market participants update their views on token utility

It’s important to note that these buyback structures are a workaround and lack official regulatory clearance. The CLARITY Act, which failed a Senate cloture vote on September 15, would give mature tokens firmer footing as commodities rather than securities, but Hougan argued that passage is not a prerequisite for regulatory clarity to continue, as the SEC has signaled it would deliver equivalent protections through rulemaking regardless of whether Congress acted.

Two bets on where this goes

For Hougan, none of these forces stands alone. Regulatory clarity is the thread running through all of them, giving institutions room to build, protocols room to pay their own token holders, and Wall Street room to move markets on-chain. That compounding effect, more than any single catalyst, is what he argues sets this cycle apart from the ones before it.

Both he and Edelman are betting on it: Hougan’s US$1.3 million Bitcoin forecast for 2035, and Edelman’s US$500,000 for 2030, remain unchanged. For now, neither is backing down.