Bitwise CIO Matt Hougan says $100 trillion could migrate on-chain as tokenization and institutional adoption replace retail speculation as the market's primary driver.
The crypto bear market, if it is still a bear market, may be ending for reasons that have little to do with Bitcoin's price. Matt Hougan, chief investment officer at Bitwise Asset Management, told the YouTube channel Crypto Insider that a structural shift is underway. Institutional capital, asset tokenization, and new financial infrastructure are replacing retail speculation and meme coins as the market's primary drivers, he said.
Hougan pointed to sideways consolidation in Bitcoin and other digital assets after months of selling pressure. That pattern, he said, historically appears when sellers begin to lose strength and accumulation phases begin. The more important factor is not price action but the behavior of different market participants. Retail selling pressure has decreased significantly, according to Hougan, while institutional investors have maintained exposure through ETFs, private funds, and regulated vehicles.
This dynamic marks a departure from 2022, when the collapse of FTX triggered a confidence crisis and a disorderly liquidation of leveraged positions. The current deleveraging process has occurred with greater institutional participation, stronger custody solutions, and more mature market infrastructure, Hougan argued.
His central thesis is not about Bitcoin alone. Hougan suggested that roughly $100 trillion could move on-chain in the coming years, driven by the tokenization of traditional assets and new financial settlement systems. That transition has already started. BlackRock launched a tokenized BUIDL fund based on U.S. Treasury assets. The product became one of the most significant institutional instruments in the blockchain ecosystem, Hougan said. Franklin Templeton, JPMorgan, and other financial institutions have advanced projects involving tokenized assets, private credit, and blockchain-based financial products.
The advantage of blockchain over traditional systems, Hougan said, is the ability to operate 24/7, reduce settlement times, and connect assets directly with decentralized applications. That transformation is being accelerated by artificial intelligence. Autonomous AI agents could become new economic participants capable of executing payments and financial operations on blockchain networks, potentially increasing on-chain activity significantly, he said.
Hougan highlighted Base, Coinbase's Layer 2 network on Ethereum, as one of the most relevant projects connecting traditional finance with blockchain technology. Base has grown rapidly in activity, total value locked, and transaction volume. Coinbase chose not to launch a native token, instead focusing on mass distribution through its user base, Smart Wallets, and tools designed to simplify the user experience. That approach reflects a broader trend: the next stage of crypto adoption will depend less on attracting specialized users and more on creating simple financial products for millions of people on traditional platforms.
The biggest question for the next cycle, Hougan said, is which projects will actually capture economic value. Protocols such as Uniswap, Hyperliquid, and Morpho represent a new generation because they generate direct economic activity through fees and clearer business models. Ethereum and Solana will likely remain essential infrastructure due to their security, liquidity, and adoption, but investors may increasingly focus on platforms capable of producing sustainable revenue.
Companies such as Robinhood and Coinbase are positioning themselves as bridges between Wall Street and the crypto ecosystem. Robinhood, with millions of retail users, continues expanding into digital assets and tokenization. Coinbase maintains a strong position among crypto-native users. The competition will no longer focus only on which technology is the most advanced, Hougan said, but on which platforms can attract the largest number of users, generate real revenue, and become essential infrastructure for institutions and individuals.
If Hougan's thesis is correct, blockchain could move beyond being an alternative financial system and become a global infrastructure layer for capital movement. The biggest transformation would not only be reflected in digital asset prices, he said, but in the evolution of finance toward more open, faster, and programmable systems.
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