Podcast source: Empire Air date: December 8, 2025 Guest: Matt Hougan, Chief Investment Officer (CIO) of Bitwise This article is adapted from the latest episode of the crypto podcast Empire, titled "Institutional Flows Will Overpower the 4-Year Cycle." The guest is Matt Hougan, Chief Investment Officer (CIO) of Bitwise . During the program, Matt engaged in in-depth discussions on key topics such as "Is the influence of Bitcoin's four-year cycle waning?", "Institutional funds are accelerating their entry into the market?", and "Does Strategy carry a real risk of being forced to sell Bitcoin?". He also offered his judgment on the debate between Haseeb and Santi regarding the valuation of the L1 public chain and shared his views on the growth drivers of the crypto market in the next stage. (The following is a transcript of the interview) Q1: The market has been fluctuating wildly recently, especially with sharp drops occurring over the weekend. What's your opinion on this? Matt Hougan: Short-term fluctuations in themselves don't mean much, but a "weekend panic mode" has indeed emerged over the past few months. Because the crypto market trades 24/7, and humans don't stay awake all year round, market liquidity is naturally weaker on weekends. In addition, some major macroeconomic policies are often released on Friday afternoons, which forces the crypto market to digest the news in advance, often amplifying it over the weekend. Therefore, I don't believe this is a fundamental change. In fact, we're discussing a market that's still flat overall this year , but sentiment has been amplified to the point of feeling like a crash. Many investors' current anxiety stems simply from the memory that "things often happen on weekends." This is not a signal of a long-term trend. Q2: From a broader perspective, how do you assess the market in 2025–2026? Is the four-year cycle still valid? Matt: I've said it many times: I believe the so-called "four-year cycle" is largely ineffective. It worked in the past because of a combination of certain factors, which no longer have sufficient influence. The supply shock from the halving is impacting the market at a decreasing rate; the interest rate environment is completely different from the two previous "cycle correction years" (2018, 2022), and we are now in a rate-cutting cycle; the risk of "systemic defaults" that caused huge corrections in previous cycles has also significantly decreased. In other words, the original forces that drove the cycle have now weakened. But on the other side, a force is growing stronger— the entry of institutional capital . In the past six months, traditional giants such as Bank of America, Morgan Stanley, UBS, and Wells Fargo have successively opened up cryptocurrency asset allocation, with a total scale exceeding $15 trillion. This is a force on a decade-long scale, enough to overwhelm the so-called four-year cycle. So I'm being very clear: I don't think 2026 will be a year of decline; on the contrary, I think it will be very strong. Q3: You mentioned that many "old retail investors' selling pressure" does not come from on-chain addresses, so where does this selling pressure come from? Matt: Many OG holders haven't sold their coins directly in recent years, so the on-chain data doesn't show any "old wallet movement," but they have exerted another equivalent selling pressure: covered call . Simply put, if they don't want to sell their Bitcoin holdings (due to high taxes) but still want to cash out their profits, they will pledge their Bitcoin to write options, in exchange for an annualized return of 10%–20%. This operation is essentially "selling" future gains to the market , and the pressure on the price is equivalent to partial selling, but it will not be marked on the blockchain as "assets transferred from old addresses". This type of business is growing very rapidly at Bitwise, and we are not the only provider. I suspect there may already be billions of dollars of implicit selling pressure in the market stemming from this structured sell-off . Q4: Is there really a risk that Strategy will be forced to sell its tokens? Why is the market repeatedly worried about this? Matt: There's absolutely no need to worry. I even think it's a misunderstanding. MicroStrategy incurs approximately $800 million in annual interest expenses, while holding $14.4 billion in cash, enough to cover the next 18 months. Its debt is around $8 billion, while its Bitcoin holdings are worth over $60 billion. More importantly, its earliest debt repayment is not due until 2027 . Unless the price of Bitcoin crashes by 90%, there is no such thing as being "forced to sell." And if it really does drop by 90%, the entire industry will be in a worse situation than MicroStrategy. Therefore, the correct concern is not "whether they will sell," but rather "they may not buy as much as before in the future." This is the real marginal impact. Q5: Which companies or institutions are you more concerned about selling pressure from? Matt: If we draw on the "missionary and mercenary" model, I believe: Missionary type (like Saylor) : Almost impossible to sell. Mercenary type (small companies that imitate MicroStrategy) : They will exit the market in the future, but they are too small to cause a systemic impact even if they are all sold off. Q6: In your meetings with large financial institutions, what are they most concerned about? Matt: I'm currently spending a significant amount of time communicating with these institutions. They ask very basic questions: Why does Bitcoin have value? How is it valued? How does it correlate with existing assets? What role does it play in an investment portfolio? A key fact is often overlooked: institutional decision-making is very slow. Bitwise's institutional clients typically need eight meetings before actually buying, and these meetings are sometimes held quarterly. So you can understand why Harvard University is only now increasing its Bitcoin holdings—they started researching from the day the ETF was listed until it was finally approved, exactly one year later. A giant like Bank of America manages $3.5 trillion in assets. Even if it only allocates 1%, that's $35 billion, which is more than the current net inflow of all Bitcoin ETFs. That's why I say institutional adoption is the most important force in the market over the next few years. Q7: Why are financial advisors (FAs) so slow to adopt crypto assets? Matt: Because their goal is not to pursue the highest return of the portfolio, but rather: "Avoid being fired by clients because of losses." If financial advisors (FAs) had allocated client funds to Bitcoin in 2021, and the FTX incident in 2022 caused the assets to drop by 75%, the clients would certainly have fired them immediately. AI stocks, such as Nvidia, could also fall by 50%, but the market narrative is that they represent a "future trend," while the media narrative surrounding cryptocurrencies remains questionable, thus posing a higher "risk of being laid off." With declining volatility and the strengthening narrative of stablecoins and tokenized assets (RWA), crypto assets are becoming more "acceptable to professional advisors". Q8: How do you explain the differences between Ethereum, Solana, and other L1 cryptocurrencies to institutions? Matt: The strategy is simple: First, emphasize the differences (technical approach, speed, cost, design philosophy). Then the suggestion was to "buy a little of everything". The reason is that advisors spend an average of only 5 hours per week researching portfolios, of which only 3 minutes may be allocated to crypto assets. Matt said: "If I only have three minutes a week to study crypto, I could never predict which chain will ultimately win, so the most reasonable approach is to diversify my holdings." In terms of comprehensibility: Uniswap and Aave are the easiest to understand because they are "decentralized Coinbases" and "crypto lending banks." Chainlink is also very popular with institutions because they can directly say: "Chainlink is the Bloomberg data terminal of the blockchain world." Q9: What are your thoughts on the debate between Haseeb and Santi regarding L1 valuation? (Note from Bitpush: Haseeb Qureshi is a partner at crypto venture capital firm Dragonfly Capital. He represents a long-term perspective and believes that the market has severely underestimated the future transaction volume and network effects of public chains (L1). Valuing them with current data would underestimate their long-term potential.) Santi Santos is a crypto investor and researcher who represents a more traditional, rational valuation approach. He emphasizes that public blockchains must ultimately be priced based on revenue, transaction fees, and real economic value , and believes that current valuations of some Level 1 blockchains have over-inflated future expectations . Matt: I think they are both right, but they have different focuses. From a long-term structural perspective, I am indeed closer to Haseeb's view. Our current assumptions about the scale of on-chain transactions, economic activity, and the frequency of asset settlement are too conservative. To give a simple example: why are salaries paid every two weeks? They could be settled hourly or even minutely, and this shift would mean an exponential increase in on-chain transaction volume. However, I also agree with Santi's point that ultimately all L1 servers must be valued based on real economic metrics . Revenue, fees, and protocol-captured value are all unavoidable. It's just that the financial data we see now is far from sufficient to reflect the future scale of the network. I would summarize it like this: Valuation will ultimately be based on financial performance (Santi is right), but the future economic scale will far exceed the current model (Haseeb is right). Q10: If you were the founder of a token project, what do you think you should do now to make your token more attractive to investors? Matt: I believe crypto projects are transitioning from a "pure community narrative era" to a "quasi-public company era." This means project teams need to learn from the mature practices of traditional capital markets, such as: Regularly publish transparent operational and financial data. Hold quarterly update conference calls Establish an investor relations (IR) team Clearly explain the agreement's revenue, economic model, and long-term vision. In recent years, many foundations have over-funded and underutilized their funds. I believe that in the future, project teams should follow Arbitrum's example and manage the national treasury as a genuine investment portfolio, rather than a short-term subsidy mechanism. These measures are not mere formalism, but rather a communication method that has proven effective in the capital market over the past century. Q11: What changes do you foresee in the future of IC *0 and token issuance models? Matt: I have always believed that the 2017 IC*0 was a "premature but correct" attempt. Its concept itself was not wrong, but the economic model was immature and the regulation was unclear at the time, which led to a large number of projects failing to deliver on their promises. I believe that ICOs will make a comeback in the future, and on a much larger scale than in 2017. Compared to traditional IPOs, ICOs are faster, more democratic, and lower in cost. Moreover, the current regulatory environment allows tokens to be directly linked to protocol economic activities, giving them real economic value. In the long run, I even believe that companies will gradually move from IPOs to native token issuance, or a combination of the two. Q12: What are your thoughts on the institutional landscape of privacy coins like Zcash? Matt: Zcash's narrative is very clear, but regulators remain sensitive to it , especially regarding compliance discussions on "default privacy vs. optional privacy". Therefore, ETFs and institutional products have difficulty accessing Zcash. However, he emphasized: "The future of crypto will expand from one narrative to ten, and privacy will be one of them." However, now is not the time for institutions to deploy privacy assets. Q13: What is your final assessment of 2026? Matt Hougan: I believe 2026 will be very strong. Institutional inflows are building momentum, the regulatory environment is shifting from headwinds to tailwinds, and new narratives such as stablecoins, asset tokenization, and on-chain finance are spreading. The market may be disappointed by these narratives at some point, but that's just a matter of pace, not direction. To summarize in one sentence: We are now simply standing at the entrance to the next huge growth cycle.Podcast source: Empire Air date: December 8, 2025 Guest: Matt Hougan, Chief Investment Officer (CIO) of Bitwise This article is adapted from the latest episode of the crypto podcast Empire, titled "Institutional Flows Will Overpower the 4-Year Cycle." The guest is Matt Hougan, Chief Investment Officer (CIO) of Bitwise . During the program, Matt engaged in in-depth discussions on key topics such as "Is the influence of Bitcoin's four-year cycle waning?", "Institutional funds are accelerating their entry into the market?", and "Does Strategy carry a real risk of being forced to sell Bitcoin?". He also offered his judgment on the debate between Haseeb and Santi regarding the valuation of the L1 public chain and shared his views on the growth drivers of the crypto market in the next stage. (The following is a transcript of the interview) Q1: The market has been fluctuating wildly recently, especially with sharp drops occurring over the weekend. What's your opinion on this? Matt Hougan: Short-term fluctuations in themselves don't mean much, but a "weekend panic mode" has indeed emerged over the past few months. Because the crypto market trades 24/7, and humans don't stay awake all year round, market liquidity is naturally weaker on weekends. In addition, some major macroeconomic policies are often released on Friday afternoons, which forces the crypto market to digest the news in advance, often amplifying it over the weekend. Therefore, I don't believe this is a fundamental change. In fact, we're discussing a market that's still flat overall this year , but sentiment has been amplified to the point of feeling like a crash. Many investors' current anxiety stems simply from the memory that "things often happen on weekends." This is not a signal of a long-term trend. Q2: From a broader perspective, how do you assess the market in 2025–2026? Is the four-year cycle still valid? Matt: I've said it many times: I believe the so-called "four-year cycle" is largely ineffective. It worked in the past because of a combination of certain factors, which no longer have sufficient influence. The supply shock from the halving is impacting the market at a decreasing rate; the interest rate environment is completely different from the two previous "cycle correction years" (2018, 2022), and we are now in a rate-cutting cycle; the risk of "systemic defaults" that caused huge corrections in previous cycles has also significantly decreased. In other words, the original forces that drove the cycle have now weakened. But on the other side, a force is growing stronger— the entry of institutional capital . In the past six months, traditional giants such as Bank of America, Morgan Stanley, UBS, and Wells Fargo have successively opened up cryptocurrency asset allocation, with a total scale exceeding $15 trillion. This is a force on a decade-long scale, enough to overwhelm the so-called four-year cycle. So I'm being very clear: I don't think 2026 will be a year of decline; on the contrary, I think it will be very strong. Q3: You mentioned that many "old retail investors' selling pressure" does not come from on-chain addresses, so where does this selling pressure come from? Matt: Many OG holders haven't sold their coins directly in recent years, so the on-chain data doesn't show any "old wallet movement," but they have exerted another equivalent selling pressure: covered call . Simply put, if they don't want to sell their Bitcoin holdings (due to high taxes) but still want to cash out their profits, they will pledge their Bitcoin to write options, in exchange for an annualized return of 10%–20%. This operation is essentially "selling" future gains to the market , and the pressure on the price is equivalent to partial selling, but it will not be marked on the blockchain as "assets transferred from old addresses". This type of business is growing very rapidly at Bitwise, and we are not the only provider. I suspect there may already be billions of dollars of implicit selling pressure in the market stemming from this structured sell-off . Q4: Is there really a risk that Strategy will be forced to sell its tokens? Why is the market repeatedly worried about this? Matt: There's absolutely no need to worry. I even think it's a misunderstanding. MicroStrategy incurs approximately $800 million in annual interest expenses, while holding $14.4 billion in cash, enough to cover the next 18 months. Its debt is around $8 billion, while its Bitcoin holdings are worth over $60 billion. More importantly, its earliest debt repayment is not due until 2027 . Unless the price of Bitcoin crashes by 90%, there is no such thing as being "forced to sell." And if it really does drop by 90%, the entire industry will be in a worse situation than MicroStrategy. Therefore, the correct concern is not "whether they will sell," but rather "they may not buy as much as before in the future." This is the real marginal impact. Q5: Which companies or institutions are you more concerned about selling pressure from? Matt: If we draw on the "missionary and mercenary" model, I believe: Missionary type (like Saylor) : Almost impossible to sell. Mercenary type (small companies that imitate MicroStrategy) : They will exit the market in the future, but they are too small to cause a systemic impact even if they are all sold off. Q6: In your meetings with large financial institutions, what are they most concerned about? Matt: I'm currently spending a significant amount of time communicating with these institutions. They ask very basic questions: Why does Bitcoin have value? How is it valued? How does it correlate with existing assets? What role does it play in an investment portfolio? A key fact is often overlooked: institutional decision-making is very slow. Bitwise's institutional clients typically need eight meetings before actually buying, and these meetings are sometimes held quarterly. So you can understand why Harvard University is only now increasing its Bitcoin holdings—they started researching from the day the ETF was listed until it was finally approved, exactly one year later. A giant like Bank of America manages $3.5 trillion in assets. Even if it only allocates 1%, that's $35 billion, which is more than the current net inflow of all Bitcoin ETFs. That's why I say institutional adoption is the most important force in the market over the next few years. Q7: Why are financial advisors (FAs) so slow to adopt crypto assets? Matt: Because their goal is not to pursue the highest return of the portfolio, but rather: "Avoid being fired by clients because of losses." If financial advisors (FAs) had allocated client funds to Bitcoin in 2021, and the FTX incident in 2022 caused the assets to drop by 75%, the clients would certainly have fired them immediately. AI stocks, such as Nvidia, could also fall by 50%, but the market narrative is that they represent a "future trend," while the media narrative surrounding cryptocurrencies remains questionable, thus posing a higher "risk of being laid off." With declining volatility and the strengthening narrative of stablecoins and tokenized assets (RWA), crypto assets are becoming more "acceptable to professional advisors". Q8: How do you explain the differences between Ethereum, Solana, and other L1 cryptocurrencies to institutions? Matt: The strategy is simple: First, emphasize the differences (technical approach, speed, cost, design philosophy). Then the suggestion was to "buy a little of everything". The reason is that advisors spend an average of only 5 hours per week researching portfolios, of which only 3 minutes may be allocated to crypto assets. Matt said: "If I only have three minutes a week to study crypto, I could never predict which chain will ultimately win, so the most reasonable approach is to diversify my holdings." In terms of comprehensibility: Uniswap and Aave are the easiest to understand because they are "decentralized Coinbases" and "crypto lending banks." Chainlink is also very popular with institutions because they can directly say: "Chainlink is the Bloomberg data terminal of the blockchain world." Q9: What are your thoughts on the debate between Haseeb and Santi regarding L1 valuation? (Note from Bitpush: Haseeb Qureshi is a partner at crypto venture capital firm Dragonfly Capital. He represents a long-term perspective and believes that the market has severely underestimated the future transaction volume and network effects of public chains (L1). Valuing them with current data would underestimate their long-term potential.) Santi Santos is a crypto investor and researcher who represents a more traditional, rational valuation approach. He emphasizes that public blockchains must ultimately be priced based on revenue, transaction fees, and real economic value , and believes that current valuations of some Level 1 blockchains have over-inflated future expectations . Matt: I think they are both right, but they have different focuses. From a long-term structural perspective, I am indeed closer to Haseeb's view. Our current assumptions about the scale of on-chain transactions, economic activity, and the frequency of asset settlement are too conservative. To give a simple example: why are salaries paid every two weeks? They could be settled hourly or even minutely, and this shift would mean an exponential increase in on-chain transaction volume. However, I also agree with Santi's point that ultimately all L1 servers must be valued based on real economic metrics . Revenue, fees, and protocol-captured value are all unavoidable. It's just that the financial data we see now is far from sufficient to reflect the future scale of the network. I would summarize it like this: Valuation will ultimately be based on financial performance (Santi is right), but the future economic scale will far exceed the current model (Haseeb is right). Q10: If you were the founder of a token project, what do you think you should do now to make your token more attractive to investors? Matt: I believe crypto projects are transitioning from a "pure community narrative era" to a "quasi-public company era." This means project teams need to learn from the mature practices of traditional capital markets, such as: Regularly publish transparent operational and financial data. Hold quarterly update conference calls Establish an investor relations (IR) team Clearly explain the agreement's revenue, economic model, and long-term vision. In recent years, many foundations have over-funded and underutilized their funds. I believe that in the future, project teams should follow Arbitrum's example and manage the national treasury as a genuine investment portfolio, rather than a short-term subsidy mechanism. These measures are not mere formalism, but rather a communication method that has proven effective in the capital market over the past century. Q11: What changes do you foresee in the future of IC *0 and token issuance models? Matt: I have always believed that the 2017 IC*0 was a "premature but correct" attempt. Its concept itself was not wrong, but the economic model was immature and the regulation was unclear at the time, which led to a large number of projects failing to deliver on their promises. I believe that ICOs will make a comeback in the future, and on a much larger scale than in 2017. Compared to traditional IPOs, ICOs are faster, more democratic, and lower in cost. Moreover, the current regulatory environment allows tokens to be directly linked to protocol economic activities, giving them real economic value. In the long run, I even believe that companies will gradually move from IPOs to native token issuance, or a combination of the two. Q12: What are your thoughts on the institutional landscape of privacy coins like Zcash? Matt: Zcash's narrative is very clear, but regulators remain sensitive to it , especially regarding compliance discussions on "default privacy vs. optional privacy". Therefore, ETFs and institutional products have difficulty accessing Zcash. However, he emphasized: "The future of crypto will expand from one narrative to ten, and privacy will be one of them." However, now is not the time for institutions to deploy privacy assets. Q13: What is your final assessment of 2026? Matt Hougan: I believe 2026 will be very strong. Institutional inflows are building momentum, the regulatory environment is shifting from headwinds to tailwinds, and new narratives such as stablecoins, asset tokenization, and on-chain finance are spreading. The market may be disappointed by these narratives at some point, but that's just a matter of pace, not direction. To summarize in one sentence: We are now simply standing at the entrance to the next huge growth cycle.

Bitwise CIO: The crypto market will be strong in 2026, but the driving forces have changed.

2025/12/10 14:00

Podcast source: Empire

Air date: December 8, 2025

Guest: Matt Hougan, Chief Investment Officer (CIO) of Bitwise

This article is adapted from the latest episode of the crypto podcast Empire, titled "Institutional Flows Will Overpower the 4-Year Cycle." The guest is Matt Hougan, Chief Investment Officer (CIO) of Bitwise .

During the program, Matt engaged in in-depth discussions on key topics such as "Is the influence of Bitcoin's four-year cycle waning?", "Institutional funds are accelerating their entry into the market?", and "Does Strategy carry a real risk of being forced to sell Bitcoin?". He also offered his judgment on the debate between Haseeb and Santi regarding the valuation of the L1 public chain and shared his views on the growth drivers of the crypto market in the next stage.

(The following is a transcript of the interview)

Q1: The market has been fluctuating wildly recently, especially with sharp drops occurring over the weekend. What's your opinion on this?

Matt Hougan:

Short-term fluctuations in themselves don't mean much, but a "weekend panic mode" has indeed emerged over the past few months. Because the crypto market trades 24/7, and humans don't stay awake all year round, market liquidity is naturally weaker on weekends. In addition, some major macroeconomic policies are often released on Friday afternoons, which forces the crypto market to digest the news in advance, often amplifying it over the weekend.

Therefore, I don't believe this is a fundamental change. In fact, we're discussing a market that's still flat overall this year , but sentiment has been amplified to the point of feeling like a crash. Many investors' current anxiety stems simply from the memory that "things often happen on weekends." This is not a signal of a long-term trend.

Q2: From a broader perspective, how do you assess the market in 2025–2026? Is the four-year cycle still valid?

Matt:

I've said it many times: I believe the so-called "four-year cycle" is largely ineffective. It worked in the past because of a combination of certain factors, which no longer have sufficient influence.

The supply shock from the halving is impacting the market at a decreasing rate; the interest rate environment is completely different from the two previous "cycle correction years" (2018, 2022), and we are now in a rate-cutting cycle; the risk of "systemic defaults" that caused huge corrections in previous cycles has also significantly decreased. In other words, the original forces that drove the cycle have now weakened.

But on the other side, a force is growing stronger— the entry of institutional capital . In the past six months, traditional giants such as Bank of America, Morgan Stanley, UBS, and Wells Fargo have successively opened up cryptocurrency asset allocation, with a total scale exceeding $15 trillion. This is a force on a decade-long scale, enough to overwhelm the so-called four-year cycle.

So I'm being very clear: I don't think 2026 will be a year of decline; on the contrary, I think it will be very strong.

Q3: You mentioned that many "old retail investors' selling pressure" does not come from on-chain addresses, so where does this selling pressure come from?

Matt:

Many OG holders haven't sold their coins directly in recent years, so the on-chain data doesn't show any "old wallet movement," but they have exerted another equivalent selling pressure: covered call .

Simply put, if they don't want to sell their Bitcoin holdings (due to high taxes) but still want to cash out their profits, they will pledge their Bitcoin to write options, in exchange for an annualized return of 10%–20%. This operation is essentially "selling" future gains to the market , and the pressure on the price is equivalent to partial selling, but it will not be marked on the blockchain as "assets transferred from old addresses".

This type of business is growing very rapidly at Bitwise, and we are not the only provider. I suspect there may already be billions of dollars of implicit selling pressure in the market stemming from this structured sell-off .

Q4: Is there really a risk that Strategy will be forced to sell its tokens? Why is the market repeatedly worried about this?

Matt:

There's absolutely no need to worry. I even think it's a misunderstanding.

MicroStrategy incurs approximately $800 million in annual interest expenses, while holding $14.4 billion in cash, enough to cover the next 18 months. Its debt is around $8 billion, while its Bitcoin holdings are worth over $60 billion. More importantly, its earliest debt repayment is not due until 2027 .

Unless the price of Bitcoin crashes by 90%, there is no such thing as being "forced to sell." And if it really does drop by 90%, the entire industry will be in a worse situation than MicroStrategy.

Therefore, the correct concern is not "whether they will sell," but rather "they may not buy as much as before in the future." This is the real marginal impact.

Q5: Which companies or institutions are you more concerned about selling pressure from?

Matt:

If we draw on the "missionary and mercenary" model, I believe:

  • Missionary type (like Saylor) : Almost impossible to sell.

  • Mercenary type (small companies that imitate MicroStrategy) : They will exit the market in the future, but they are too small to cause a systemic impact even if they are all sold off.

Q6: In your meetings with large financial institutions, what are they most concerned about?

Matt:

I'm currently spending a significant amount of time communicating with these institutions. They ask very basic questions: Why does Bitcoin have value? How is it valued? How does it correlate with existing assets? What role does it play in an investment portfolio?

A key fact is often overlooked: institutional decision-making is very slow.

Bitwise's institutional clients typically need eight meetings before actually buying, and these meetings are sometimes held quarterly. So you can understand why Harvard University is only now increasing its Bitcoin holdings—they started researching from the day the ETF was listed until it was finally approved, exactly one year later.

A giant like Bank of America manages $3.5 trillion in assets. Even if it only allocates 1%, that's $35 billion, which is more than the current net inflow of all Bitcoin ETFs.

That's why I say institutional adoption is the most important force in the market over the next few years.

Q7: Why are financial advisors (FAs) so slow to adopt crypto assets?

Matt:

Because their goal is not to pursue the highest return of the portfolio, but rather:

If financial advisors (FAs) had allocated client funds to Bitcoin in 2021, and the FTX incident in 2022 caused the assets to drop by 75%, the clients would certainly have fired them immediately.

AI stocks, such as Nvidia, could also fall by 50%, but the market narrative is that they represent a "future trend," while the media narrative surrounding cryptocurrencies remains questionable, thus posing a higher "risk of being laid off."

With declining volatility and the strengthening narrative of stablecoins and tokenized assets (RWA), crypto assets are becoming more "acceptable to professional advisors".

Q8: How do you explain the differences between Ethereum, Solana, and other L1 cryptocurrencies to institutions?

Matt:

The strategy is simple:

  1. First, emphasize the differences (technical approach, speed, cost, design philosophy).

  2. Then the suggestion was to "buy a little of everything".

The reason is that advisors spend an average of only 5 hours per week researching portfolios, of which only 3 minutes may be allocated to crypto assets.

Matt said:

In terms of comprehensibility:

  • Uniswap and Aave are the easiest to understand because they are "decentralized Coinbases" and "crypto lending banks."

  • Chainlink is also very popular with institutions because they can directly say:

    "Chainlink is the Bloomberg data terminal of the blockchain world."

Q9: What are your thoughts on the debate between Haseeb and Santi regarding L1 valuation?

(Note from Bitpush: Haseeb Qureshi is a partner at crypto venture capital firm Dragonfly Capital. He represents a long-term perspective and believes that the market has severely underestimated the future transaction volume and network effects of public chains (L1). Valuing them with current data would underestimate their long-term potential.)

Santi Santos is a crypto investor and researcher who represents a more traditional, rational valuation approach. He emphasizes that public blockchains must ultimately be priced based on revenue, transaction fees, and real economic value , and believes that current valuations of some Level 1 blockchains have over-inflated future expectations .

Matt:

I think they are both right, but they have different focuses.

From a long-term structural perspective, I am indeed closer to Haseeb's view. Our current assumptions about the scale of on-chain transactions, economic activity, and the frequency of asset settlement are too conservative. To give a simple example: why are salaries paid every two weeks? They could be settled hourly or even minutely, and this shift would mean an exponential increase in on-chain transaction volume.

However, I also agree with Santi's point that ultimately all L1 servers must be valued based on real economic metrics . Revenue, fees, and protocol-captured value are all unavoidable. It's just that the financial data we see now is far from sufficient to reflect the future scale of the network.

I would summarize it like this:

Valuation will ultimately be based on financial performance (Santi is right), but the future economic scale will far exceed the current model (Haseeb is right).

Q10: If you were the founder of a token project, what do you think you should do now to make your token more attractive to investors?

Matt:

I believe crypto projects are transitioning from a "pure community narrative era" to a "quasi-public company era." This means project teams need to learn from the mature practices of traditional capital markets, such as:

  • Regularly publish transparent operational and financial data.

  • Hold quarterly update conference calls

  • Establish an investor relations (IR) team

  • Clearly explain the agreement's revenue, economic model, and long-term vision.

In recent years, many foundations have over-funded and underutilized their funds. I believe that in the future, project teams should follow Arbitrum's example and manage the national treasury as a genuine investment portfolio, rather than a short-term subsidy mechanism.

These measures are not mere formalism, but rather a communication method that has proven effective in the capital market over the past century.

Q11: What changes do you foresee in the future of IC *0 and token issuance models?

Matt:

I have always believed that the 2017 IC*0 was a "premature but correct" attempt. Its concept itself was not wrong, but the economic model was immature and the regulation was unclear at the time, which led to a large number of projects failing to deliver on their promises.

I believe that ICOs will make a comeback in the future, and on a much larger scale than in 2017. Compared to traditional IPOs, ICOs are faster, more democratic, and lower in cost. Moreover, the current regulatory environment allows tokens to be directly linked to protocol economic activities, giving them real economic value.

In the long run, I even believe that companies will gradually move from IPOs to native token issuance, or a combination of the two.

Q12: What are your thoughts on the institutional landscape of privacy coins like Zcash?

Matt:

Zcash's narrative is very clear, but regulators remain sensitive to it , especially regarding compliance discussions on "default privacy vs. optional privacy".

Therefore, ETFs and institutional products have difficulty accessing Zcash.

However, he emphasized:

However, now is not the time for institutions to deploy privacy assets.

Q13: What is your final assessment of 2026?

Matt Hougan:

I believe 2026 will be very strong. Institutional inflows are building momentum, the regulatory environment is shifting from headwinds to tailwinds, and new narratives such as stablecoins, asset tokenization, and on-chain finance are spreading. The market may be disappointed by these narratives at some point, but that's just a matter of pace, not direction.

To summarize in one sentence:

We are now simply standing at the entrance to the next huge growth cycle.

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