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Bitwise CIO Matt Hougan’s $6.5M Bitcoin Call: “Long Term Investors Will Be Rewarded” | Markets Outlook
00:26:02
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- [00:00]
Matt Hogan
What the precious metals rally is telling you, not the last few weeks but the last year is that the world is worried about fiat currencies. The world is interested in self custody. Those roads eventually lead to bitcoin and crypto.
- [00:22]
Jen Senassi
Hey everyone, you're watching markets outlook on CoinDesk. I'm Jen Senassi here with Andy Baer. And joining us this morning is Bitwise C. CIO Matt Hogan. Matt, welcome to the show. Happy New Year.
- [00:34]
Matt Hogan
Happy New Year. I'm so glad to be here.
- [00:36]
Jen Senassi
We're so glad to have you here. Now I wish the news, I wish we kicked off 2026 and in a little bit of a better state. I mean bitcoin and eth down over 5% this morning. Talk to us about how you've been watching the markets over the first month of the year. What are you taking away? What is this telling you about where we're going?
- [00:54]
Matt Hogan
Yeah, look, we're extremely bullish long term on where crypto is going, including through the end of this year. I think what we're working realized after reflecting over the new year is we were in a bear market in 2025. Many of the altcoins down 60 plus percent. Bitcoin would have been down sharply if not for the huge buying by corporations and ETFs. So we're in the bottoming phase that comes at the end of a bear market. I think that's what we're seeing this year. We're seeing a little bit of capitulation on ETF flows which have been weak. We still see retail sentiment pretty weak. I think we're at the sort of the rounding bottom part of the end of a bear market and I'm pretty optimistic about where we go. I know it's looking rough out there today, but I still think the stars are aligned for a good 2026.
- [01:40]
Jen Senassi
Well, where do we go?
- [01:42]
Matt Hogan
Oh well look, I think we're going to. My actual expectation is that we chop higher for a period. If you talk to long term crypto investors, if you look at the skew in the options market, what you see is this pretty strong channel between about 75 and a little bit above 100,000. I still think there's a lot of bitcoin for sale around that $100,000 mark. I think it would take us a lot to get through that. So for the first half of the year I expect we sort of chop sideways in the channel. But as we continue to stack good news, if we get clarity passed, if people sort of better digest warsh's apparent nomination to lead the Fed. I think we're going to eventually break out of this range, but I don't think it'll be Q1. I think this is a sideways market for a while as we round through the end of this bear market. But look, the fundamentals are really good. You're seeing transaction activity looking good, you're seeing app activity looking good. The case for bitcoin is a store of value looks good. We will get there, but we have to chop through it for a while.
- [02:43]
Andy Baer
You and others have written about the confounding situation with precious metals and how they've been reacting in a not quite rational way, you know, considering their natural temperament and how to kind of restore the mental model of how bitcoin should behave with respect to gold and how silver's gone completely off the deep end. You know, maybe it's time for an update there because I think people who are wandering into precious metals now have to realize they're in a, in a market that probably has a lot of dynamics beneath the surface.
- [03:14]
Matt Hogan
Yeah, it's a full blown momentum market. It's like the tail end of the GameStop phenomenon. That's the mental model for what's happening in silver. This is the late stage of the precious metals altcoin rally and you've already seen sort of gold break in the way. In crypto land, bitcoin is often the first one to turn down. I think we're again at the late stage of that. More broadly though, what the precious metals rally is telling you, not the last few weeks, but the last year, is that the world is worried about fiat currencies. The world is interested in self custody. Those roads eventually lead to bitcoin and crypto. I've been telling people, when I go to institutional investors, a year ago I was telling them about bitcoin being digital gold and it was 10% of the gold market and that's pretty substantial. And you had to convince them that would go from 10% to 20% of the gold market. And they're thinking this is a real thing. But that's a big leap. Now that the gold market is so much bigger, you're going in, we're saying we're 4 or 5% of the market. It's easy to imagine that doubling. So I do think when we get past this, when the momentum breaks, when the frenzy breaks, I think this move will be good for bitcoin. But we do have to sort of get through the end of this momentum market.
- [04:29]
Jen Senassi
You wrote about this global breakdown in Trust in one of your recent writings about precious metals and you talk about this catalyst for gold's rise in central banks fearing seizure of assets. Talk to me a little bit about how you see central banks holding Bitcoin. I mean, it sounds like you think that this is going to be something that central banks get into. And what does that timeline look like?
- [04:47]
Matt Hogan
Yeah, well, eventually all roads lead to Bitcoin because it is a superior tool for what central banks are trying to achieve. The primary difference between Bitcoin and gold from a self custody perspective is that when you buy gold, you can self custody it while you hoard it. You can keep metals in vaults in your countries, but as soon as you want to use it, as soon as you want to pay for something, send it somewhere, balance trade, you lose that self custody. You rely on intermediaries. You have to put it on a train, a plane, a boat. You have to use a centralized vault that someone else controls. So gold is self custody while holding, but not while transacting. The difference with Bitcoin is that you get to self custody it all the way through to settlement. Up to the moment that it transfers from you to someone else, you're in complete control and no one can hold it. So as central banks sort of mature in their understanding of Bitcoin and as the world moves to where gold and hard currencies are used more for settling transactions, I think they're going to come to Bitcoin eventually. I think they'll own more Bitcoin than gold. How long will that take? These guys move on a glacial pace, right? You're talking about 10 years, you're talking about 20 years. But I do think the roads lead there. And I will say we've already had meetings with central banks this year at Bitwise. So they are interested, they are studying, but they're early in their journey and they move slow. But make no mistake, eventually those roads lead to Bitcoin. Eventually central banks will own more Bitcoin than they do gold because it is a super simply better tool.
- [06:26]
Andy Baer
As our industry goes to Washington and the Clarity act passage has been frustratingly slow and impacted by government shutdowns and weather and whatever else the universe seems to want to throw at it, we still have at least policies in place that allow a lot of ETFs to be listed, including ones by your company. And that already provides a pretty rich environment. It's tough to dial back approval of ETFs once they're out in the market, you know, at least for a bit more adoption. Momentum is how important is clarity? And where do you think actually it really starts to hit when it comes to the permanence of the, let's say the supportive marketplace right now?
- [07:06]
Matt Hogan
Yeah, I've described clarity as the punxsutawney fill of crypto. I think if we don't get clarity crypto, this crypto winner sees its shadow and we have like six more weeks of that winter. But the thing about that is, ultimately to your point, we end up at the same place. So what clarity does is there are cements the pro crypto regulatory tilt in Washington so we can count on it for years to come. If clarity passes, I think crypto investors will recognize and reward that by assuming that stablecoins and tokenization are basically fate accompli. If it doesn't pass, there is more uncertainty in that regulatory outlook. But as you said, the genie is already out of the bottle. There are already ETFs. BlackRock's most profitable ETF is now a crypto ETF. They're not going to turn anti crypto. You have JP Morgan, you have bank of America, you have Morgan Stanley building on crypto, then we're not going to go back to the Gensler era rules. But I do think it changes the shape of the coming bull market. Again, if clarity passes, I think it's a fast market. If it doesn't pass, it's a slow market. But we end up in the same place, right? Stablecoins and tokenization and ETF growth is not going to be denied clarity or no clarity. It's just how fast do we get to where we're going?
- [08:24]
Andy Baer
You bring up stablecoins and tokenization and you know, while we're sort of wading through the snow drifts here in New York City and wading through a very soft and wandering market, there's, there's a lot going on. And this idea of solidifying and identifying sources of yield for stablecoins that are safe and managed continues to be the slow money, you know, marching ahead. And your firm's announcement the other day actually came as a little bit of a surprise because it's a big steer away from a lot of the other products that you've released lately to have, you know, a defi vault. It's, it's far, far away from the world of getting ETFs approved. You know, is this client demand coming in? Is this, is this bitwise trying to, you know, skate to where the puck's going to be? Or is it just that this kind of yield conversation is so big that you're trying to make sure that you get a horse in the race.
- [09:14]
Matt Hogan
Yeah, absolutely. I think it's two things. First, from like a 10 year perspective, I think vaults are ETFs 2.0. I remember back when ETFs launched and people were skeptical of them and they were in a small corner of the market, but they were a better, faster technology that appealed to a unique part of the investing community and they are now a $30 trillion market and growing. I think vaults will eventually be the way all asset management works because I think all assets are moving on chain and vaults are the asset management overlay of assets on chain. So part of this is a big bet on where the market is going. There's going to be an ishares of vaults and I hope that it's Bitwise from a more short term perspective. Absolutely. Driven by client demand, we're talking to crypto native institutions and foundations that want access to yield, but want a well established firm with a brand and an eight year track record and enough staff to manage it from a due diligence perspective to offer that service to them. So we do think there's immediate demand for our service. There are other great vault providers. Gauntlet is amazing, Steakhouse is amazing, Chaos Labs is amazing. But we think there is room. We think we're in the pre season of the growth of vaults and Bitwise appeals to a certain set of institutions and we're talking to them now. And so we expect significant growth in both the short and the long term. But it's a big announcement for us. I think it's a huge area of growth for the next 10 years.
- [10:45]
Jen Senassi
Well, that's aligned with one of your predictions at the end of last year that on chain vaults are going to double in assets under management this year. Does that slow if clarity doesn't pass?
- [10:54]
Matt Hogan
I don't think so. Because right now the vault world is appealing to crypto native institutions. I don't expect my uncle to invest in a vault. I don't expect a Morgan Stanley advisor to invest in a vault. Bitwise serves that audience through our ETF channel. But these are crypto native institutions that trust and keep their capital on chain, but need to access yield and are excited to get 5 or 6% with over collateralized loans backing that yield versus 3 or 4% in a tokenized money market fund. So that audience will still want Volts regardless of what happens with Clarity. It's a crypto native play at this point. Again, eventually I think it expands to everyone that will be helped by clarity. But for the next year, the doubling that we predicted or the significant move upwards in Volt Aum, I think that's driven by crypto native economy and happens regardless of what happens on clarity.
- [11:51]
Andy Baer
Now the next step for vaults would be yield first money, you know, money market equivalence first, but then manage portfolios. And there are a couple of firms who've been, I think, taking a stab at this for years with robust systems, but maybe a bit early or maybe with distribution. That's not finding the right place. That's got to be on your radar, right? When this Yield Vault initiative is successful.
- [12:15]
Matt Hogan
That that's exactly right. Right now it's yields. Eventually it's everything. Including long only portfolio strategies. I do think the things that make that work are brand track record and you said it, distribution. In the history of asset management, long only strategies always require sort of hands on distribution and unique strategies. That will be true in vaults as well. But to make that analogy, back to ETFs, for the first two decade or 15 years of ETFs, it was equity only. And now they're the primary way people invest in bonds. This is how asset management innovations happen. They happen in one area and then they expand to everywhere else. I think that's going to happen in vaults pretty quickly. And I wouldn't be surprised if some of the largest traditional asset managers in the world are looking at what we did and saying they should be doing something at vaults. So I think this space is much bigger than people give it credit for. I think it's a real sort of historic innovation in asset management.
- [13:14]
Jen Senassi
I want to come back to what you were saying about central banks. Can you tell us a little bit about the questions central banks are asking about Bitcoin? And are you able to tell us what central banks you've been talking to?
- [13:23]
Matt Hogan
I can't tell you which central banks I've been talking to, unfortunately, but they range in geography around the world and in size of countries. So it's actually a relatively diverse list. They're still asking. To be honest, I wish I were saying they were asking implementation questions. Size, liquidity, et cetera, custody. They're still asking very fundamental questions about Bitcoin. They're worried about existential risks. If you think of where institutional investors were in like 2018 when they asked sort of fundament, what is this mining? How does it work? Why is it secure? What about quantum risk? Asking all the sort of FUD questions, that's where central banks are. That's a part of the process so they're not anywhere near, I don't want to suggest in mass. They're near allocating, you know, they're near allocating when they want to talk about liquidity and custody and more implementation questions. We're not getting those questions. It's still fundamental questions, but the important thing is that they're asking them, right? Two years ago they were not asking them, now they're asking them. Crypto adoption is a series of waves and different people are at different points on those waves. Retail was the first wave. Financial advisors was the next one. Family offices was the next one. We're seeing endowments and insurance companies along. Central banks are probably the last and the largest wave. So they are coming, but it's still going to be a significant amount of time. That's just the speed at which these institutions work.
- [14:54]
Andy Baer
We like to think that serious investors or policy setters don't chase returns. Right. We like to think that they will really kind of take their pencils out and look at things like volatility and correlation and, and covariance of price movement with other factors that are important to their portfolios, you know. Yet 2025 didn't really hand us a good PowerPoint slide to be able to make the case of steady growth, especially in a year when growth was expected. But what we do have is that Bitcoin's volatility is, is being compressed and will continue to be compressed by yield seekers and buy broader holdings. Is that helpful? What would be on your wish list to like up 10%, you know, sustained 30% volatility or sustained, you know, point three correlation with equities? Like which of those is really going to help make the case strongest?
- [15:46]
Matt Hogan
Yeah, the constrained volatility is hugely helpful for the audience, the primary audience that bitwise serves, which is the institutional community, they can't touch something with a 60 volt. So one of the most effective talking points that I bring into those conversations is I show people slides that look, Bitcoin is actually less volatile than Nvidia. Do you own Nvidia? You do. So can you own Bitcoin? You can. That is, it's a different audience. I think part of retail would prefer higher volume and higher potential returns. But actually lower volume was still way above market returns. Appeals to this institutional community. Our forecast, we wrote a long term capital markets paper on Bitcoin is that bitcoin volume will continue to decline, albeit at a lower rate and that upside will be lower than it was in the past. But we still expect Bitcoin to be the fastest growing major financial asset in the world. So if you can get that kind of growth with constrained volume, I think that is the magic combination for institutions and, and that is what we're seeing. I'll close with one more Note. You mentioned 2025 was a challenging year. Bitcoin down 5, many other assets down more. We did a survey of financial advisors in December, asked a couple hundred financial advisors who owned bitcoin do they plan to increase, maintain or decrease their exposure in 2026. And this was at the end of sort of the worst period post October 10th. 99% said they would increase or maintain their exposure. And part of that is what you're talking about. The volatility is constrained. Things go up and down. People can handle that. As long as you have a more rational, mature asset, it will appeal to this more institutional community.
- [17:32]
Jen Senassi
Matt, I was listening to you on a podcast recently and I know you have a six and a half million dollar Bitcoin prediction in the next 20 years. What needs to happen for bitcoin to go from where it is today? I think close to $80,000 to six and a half million.
- [17:45]
Matt Hogan
Yeah. Well the only thing that I think could stop that is if governments around the world stop spending too much money and printing money. And I think that's highly unlikely. I think the technology is inevitable. I think as I mentioned at the start of this, the technology is superior to gold. The learning process in bitcoin over the last 15 years has suggested more and more people realize that every year it's not a direct path goes up and down. But we're just now talking about central banks asking fundamental questions about bitcoin. As long as what's been happening for the last 15 years, money printing, debt and debasement, Bitcoin functioning and people learning about that. As long as that continues for the next 20. To me, from my view it's f complete. Maybe I'm too conservative. If you look at what's been happening in gold, maybe that prediction is too conservative. So all we need to get there is what we've had for the last 15 years. As long as the future isn't dramatically different than what we've seen and that's not what I see. Looking at what's happening, I think we're going to get there. It's just a matter of time and long term investors will be rewarded.
- [18:52]
Jen Senassi
Matt, Andy and I were speaking to Kevin O' Leary last week. He told us he sold 27 of his crypto positions. He's only holding Bitcoin and ETH, he's really focusing on power and infrastructure. Now talk to us about how you're looking at the ecosystem side of Bitcoin and eth. Is it still an attractive ecosystem for retail investors who are looking, who are watching folks like Kevin o' Leary say this?
- [19:16]
Matt Hogan
Yeah, again, I go back to that mental framing of we're coming out of a bear market. For people who have been in crypto a while, you should be thinking about this being like early 2023 or maybe early 2019. That is the condition we're in. And if you go back to both of those moments, alts were as dead as dead could be. When I look at the underlying sort of system of what's working, I don't think that's true now. I don't think we're going to see all alt assets eventually rise, but I find it highly unlikely that this is just a two chain outlook. I think there are tremendous assets underneath. I think Solana looks really attractive at a $60 billion valuation. I think chainlink looks really attractive at a $10 billion valuation. I think there's some apps down, sort of further down the spectrum that are really exciting. And I think we'll continue to see things like Hyper Liquid that come out of nowhere, drive real revenue and are hugely valuable. So again, I don't think we're going to see a general rising tide. I think many of Kevin's 27 investments that he sold are probably going to go to zero. He'll probably be happy he got out of there. But if you think there won't be another Solana, another Hyper Liquid, another aave, another chainlink, another new asset that emerges, the history of technology would just suggest that that's wrong. So I don't think that's the case. I think sentiment is down because we're at the end of a bear market and I think we're going to see some really exciting things in the years ahead.
- [20:42]
Jen Senassi
Okay. Now, Matt, for a long time, Solana was called the Eth killer. And I think that narrative is coming back in a little bit of a different way when we talk about the chain that's going to be the chain for Wall Street. I know you're very bullish on Solana. I know you're very bullish on Solana for Wall Street. Talk to me about that Eth versus Solana narrative. Where are you placing your bets?
- [21:01]
Matt Hogan
Yeah, look, I think it's steel, sharpened steel. And I should say that we're very bullish on Ethereum as well. I think they'll Both do exceptionally well. They're both sort of the leading primary chains for stablecoins, tokenization, DeFi and other apps. I think both of those markets will continue upwards for the next five years. What I find attractive about Solana on a relative basis is, is that the valuation is just so small compared to where Ethereum is. So I think you sort of get two bets at once. You get this bet on layer ones serving the fast growing stablecoin and tokenization market becoming more valuable in the future. That's a bet I'll make all day. And then you have a bet on Solana gaining relative share from its current low level. And that's also an enticing bet. But I own like I own and love both. I think the market undervalues both. I think it underestimates the scale of transaction activity that will take place once we're in a 24,7 blockchain enabled world. So I love both of them. It's only the relative small size, the sort of challenger nature of Solana that makes it particularly attractive. But yeah, I own both in my portfolios and in my personal portfolio and I'm excited where both are going.
- [22:15]
Andy Baer
For the 3 percenters or 5 percenters out there who spend a lot of time getting comfortable with Bitcoin but now read a lot of stablecoin news and tokenization news and can't knit it back to an investable asset so easily. Is the layer one conversation a little bit easier to have? I still don't see in distribution circles. Back to the distribution question. Good fundamental narrative that's linking the fact that Ethereum owns half the stablecoin market and you kind of need, you kind of need Ethereum to have all this stablecoin growth. Is that message starting to become a little bit more saturating or does it still feel early?
- [22:54]
Matt Hogan
Yeah, everyone on the institutional side wants exposure to the growth of stablecoins and tokenization. And what that means, for what it's worth, is owning Ethereum, owning Solana, owning Chainlink and owning crypto equities like Circle. I think you need both because it's unclear exactly where the value will accrue. But we've seen significant interest in that stablecoin like exposure across those assets. It comes up in every conversation we have and we've seen significant interest in crypto equities that are providing that exposure. Right. Actually, crypto equities in the tokenization space have been doing pretty darn well recently. That market has been ebullient even while crypto has been challenged. So, yes, every institution that we speak with is thinking about getting beyond Bitcoin to other assets. I think a lot of them will make stablecoin specific plays. I think a lot of them will buy index products like our bitW ETF and just say I just want to own the market and not worry about the details. But that is definitely a theme. I don't think investors are going to stop at Bitcoin only. I think they want to own crypto across equities and assets broadly diversified. I think that's the direction of travel for this industry.
- [24:08]
Jen Senassi
And Matt, the last piece of news we want to touch on with you today is we learned this morning that President Trump has nominated Kevin Warsh to be the next chair of the Federal Reserve. Talk to me about how you're thinking about this piece of news. How's it going to affect crypto markets?
- [24:21]
Matt Hogan
Yeah, look, I'm looking at the data, the CME Fed Watch data where the market estimates the future likelihood of rate cuts. I think the media narrative is the that amongst the choices of Fed chairman, you know, Warsh, Hassett, Reeder, et cetera, that Warsh is the most hawkish and less likely to cut rates. That's what I'm seeing reported in major media outlets. But the data suggests something else. Actually what the data is pricing in is a slightly higher probability of rate cuts through the end of the year. I think what that tells you is the market expects wars to be in a very effective chairman. Right. By what I mean by that, it's not enough for the chairman to want to cut rates. He needs to be able to convince the rest of the board to cut rates as well. Warsh is definitely part of that ecosystem. He's a former Fed governor, he's hugely well respected. And I think the reason you're seeing in the data that they're actually increasing the probability of rate cuts by year end is that they expect Warsh to be able to do that and lead the Fed. So individually he may be more balanced than a Hasset, right? Not as aggressively dovish, but as an institution maybe the Fed is more effective and over long term. Look, I don't think this is the primary driver of what's happening in Bitcoin, but I think this is a good choice for Fed chair and is probably an incremental positive on the edge. I don't think again it's a big deal, but I think it's incrementally positive. And I do think the media, so far the reporting has generally gotten it wrong. At least compared to what the. The traders are saying in the Fed fund futures market.
- [25:53]
Jen Senassi
Matt, it's always a pleasure having you on. Thanks for joining us.
- [25:56]
Matt Hogan
Yeah, thanks for having. Me.