Bitwise's Horsley and Hougan urge crypto allocators to evaluate projects like companies, citing four assets that gained 17-72% on fundamentals. CLARITY Act vote is key catalyst.
The crypto market’s rotation out of momentum-driven trading is accelerating, and the CEO of one of the largest crypto asset managers is telling investors to adapt or get left behind. Hunter Horsley, chief executive of Bitwise Asset Management, published a post on June 8 urging crypto allocators to stop watching weekly price swings and start evaluating projects the way they would evaluate a public company. The advice lands as Bitcoin trades near $62,800 and the broader crypto market lags a Nasdaq-100 that has surged 43% year over year, driven by AI stocks, robotics firms, and private companies like SpaceX.
Horsley’s message is not a market call. It is a structural observation about what kind of capital will drive the next phase of crypto growth. The shift from momentum to fundamentals carries implications for portfolio construction, asset selection, and the timeline over which returns should be measured.
Matt Hougan, Bitwise’s chief investment officer, laid the groundwork in a June 2 market memo. He described crypto as going through “a painful transformation – from momentum trade to contrarian investment.” The memo argued that investor attention has migrated to AI and space technology, leaving crypto to rely on long-term fundamentals rather than narrative-driven inflows.
Horsley’s June 8 post reinforced the same thesis. He advised investors to ignore “the news of the week or the month’s price movements” and instead focus on two things: real progress in the project and year-on-year performance of the assets.
The shift is visible in the data. Hougan cited four cryptocurrencies that posted gains of 72%, 50%, 44%, and 17% – Hyperliquid, Zcash, Stellar, and BNB, respectively – and noted that none of those moves correlated with broad market strength. Each asset rose on project-specific catalysts, not a rising tide.
The Nasdaq-100 has absorbed a disproportionate share of institutional and retail flows over the past 12 months. AI-related names like Nvidia and Microsoft have driven the index, while private companies such as SpaceX and OpenAI have attracted venture capital that might otherwise have flowed into crypto. Horsley acknowledged the envy among crypto natives. He pointed out that the breakthroughs in AI and space took years – SpaceX was founded in 2002, OpenAI in 2015 – and faced repeated failures before reaching scale.
The implication is not that crypto is inferior. The maturation timeline is compressed relative to the hype cycle. Investors who expect instant returns are misaligned with the actual development pace of the technology.
Horsley made a more pointed observation in a June 5 interview with Milk Road. He noted that crypto natives “are not used to an environment in which an hour is fast. A day is fast. A week is a meaningful period of time, and nobody can recall what was going on 4 weeks ago.”
That quote captures the gap between retail momentum traders and institutional allocators. Institutions operate on quarterly and annual cycles. They conduct due diligence over months, not hours. They require regulatory clarity, auditable financials, and evidence of product-market fit before deploying capital.
The practical consequence is that assets that rely on daily volume spikes or exchange listings for price action will struggle to attract institutional bids. Assets that demonstrate on-chain adoption, revenue generation, or enterprise integration will command a premium. The market is repricing the value of patience.
Hougan’s memo made the same point in different terms: “When crypto stops being a momentum trade, fundamentals start to matter.” The mechanism is straightforward. When the marginal buyer is a speculator, narrative drives price. When the marginal buyer is an allocator, cash flows and usage metrics drive price.
Horsley defined “real progress” as four specific criteria:
Hougan’s examples of fundamental-driven movers provide a concrete screen:
None of these assets moved on a macro tweet or a Bitcoin breakout. Each gained because of project-specific fundamentals that institutional analysts can model.
Hougan identified the Digital Asset Market Clarity Act – commonly called the CLARITY Act – as a critical unresolved variable for institutional adoption. The proposed legislation would define the jurisdictional boundary between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It would establish a regulatory framework for digital commodity trading platforms, brokers, and dealers.
Galaxy analysts have assigned a 50% chance of passage. That binary outcome is the single most consequential regulatory catalyst for the sector in 2025.
If the bill passes, institutional allocators gain a clear legal framework for custody, trading, and reporting. The cost of compliance drops. The risk of enforcement action recedes. That would unlock capital that is currently sidelined.
If the bill stalls, the current regulatory vacuum persists. The SEC and CFTC continue to jockey for jurisdiction. Large allocators remain on the sidelines. The market remains driven by retail speculation and offshore liquidity.
Congress is expected to take up the bill in the current session. A vote before the end of the year is plausible. The 50% probability from Galaxy reflects the political uncertainty around crypto legislation in an election year.
Horsley and Hougan are making the same bet from opposite angles. Horsley says extend your time horizon to year-over-year. Hougan says the market is already rewarding fundamentals. Both believe the next wave of growth will come from investors who evaluate projects as they would evaluate any company, not as they would speculate on memecoins.
The biggest risk is that institutional capital does not follow through. If the CLARITY Act stalls and the Nasdaq-100 continues to outperform, crypto could remain range-bound for an extended period. Momentum traders who refuse to adapt will underperform. Fundamental investors who pick the right projects may outperform. The timeline will be measured in quarters, not weeks.
The shift from momentum to fundamentals is not a prediction. It is a description of what is already happening. The four assets Hougan cited – Hyperliquid, Zcash, Stellar, BNB – are proof of concept. The question is whether the broader market follows or remains stuck in a speculative loop.
For allocators, the decision is simple: adapt the evaluation framework or accept that the next leg of the market will happen without you. The tools are on-chain data, product-market fit analysis, and a calendar that marks the CLARITY Act vote, not the next Bitcoin halving.
This article is for informational purposes only and does not constitute investment advice. Always conduct independent research before making allocation decisions.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.