Bitcoin Insider Reveals Why Institutions Are Scrambling To Buy The Dip! | Matt Hougan

Summary

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Podcast Summary: The Wolf Of All Streets

Episode: Bitcoin Insider Reveals Why Institutions Are Scrambling To Buy The Dip!

Host: Scott Melker
Guest: Matt Hougan (Chief Investment Officer, Bitwise Asset Management)
Date: March 1, 2026

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Overview

This episode centers on why institutional investors are increasingly bullish on Bitcoin and crypto assets despite the ongoing bear market, focusing on their cautious timeline, shift in market access, and the evolving narrative around tokenization and stablecoins. Matt Hougan provides deep insights into how institutional capital moves, why the current conditions are attractive for allocation, and how new infrastructure and regulatory developments are shaping long-term strategies.

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Key Discussion Points & Insights

1. Institutional Behavior in Crypto’s Bear Market

• Institutions that missed allocating in 2024 or 2025 now see the bear market as an opportunity.
• Retail investors are deeply pessimistic, but institutions operate on longer horizons and are not shocked by volatility.
• Matt (00:00): “Crypto retail entered full bear market. It hit its lowest level ever. It’s at 5 if you want to think about it on a scale of 1 to 100. It’s way over here. The average Bitwise client takes eight meetings before they allocate.”
• Net inflows continue even during market downturns, driven by institutions capitalizing on perceived entry points.

2. The Institutional Allocation Process

• The process is slow and methodical – “not at a Twitter pace, it moves at an institutional pace.” (00:00, 08:47)
• Allocation typically starts with a few clients, then expands as trust and internal experience grow.
• Q4 2025 marked a pivotal moment where most major wirehouses began to allow proactive crypto recommendations.
• Matt (04:29): “Now, three out of the four major wirehouses can proactively talk about it with clients. The fourth one will come on board soon.”
• The “test case” approach: Advisors and early clients act as crash test dummies before broader rollouts.

3. The Expansion Across Institution Types

• The path to adoption is sequential and categorized:
  • First: RIAs (independent financial advisors)
  • Then: Wirehouses (Morgan Stanley, Wells Fargo, etc.)
  • Followed by: Family offices, insurance companies, pensions, endowments, sovereign wealth funds, central banks (07:13)
• Matt (07:13): “It starts one place and it expands throughout the whole stack... We’re going to get all the way down.”

4. Market Penetration & Remaining Barriers

• About 20–25% of wealth management firms still do not provide access to Bitcoin/crypto.
• Institutions moving “fast”—by their standards—but still lagging crypto-native expectations.
• Vanguard and other conservative institutions are beginning to shift, evidence that full mainstream adoption is not far off. (08:22)

5. The Bitwise Pitch & Crypto-Native Specialists

• Bitwise’s edge lies in dedicated, crypto-only focus with a 25-person sales force for hands-on support.
• Matt (10:00): “We’re built to serve the advisor community. No other crypto asset manager I know has 25 full time salespeople that will show up in their office... We donate to bitcoin core developers. But in the end, these advisors want someone they can call.”
• Specialist firms often outperform generalists (like BlackRock in traditional assets) as markets mature.

6. The Current Bear Market vs. Previous Winters

• Post-FTX (2022) felt existential; the current market feels like a healthy correction with little fear of industry collapse.
• Institutions are buying with long-term conviction, not short-term fear.
• Memorable exchange (13:12)
  • Scott: “Do we need to all be giving up and in the depths of despair to put the bottom in?”
  • Matt: “Crypto retail entered full bear market... It’s an asymmetric opportunity.”

7. The Institutional Narrative: Bitcoin, Tokenization, and Stablecoins

• The hottest topics for institutions now are tokenization and stablecoins, not just Bitcoin and Ethereum.
• Matt (14:48): “Institutions love tokenization and stablecoins... They assume it’s fait accompli. BlackRock’s on Uniswap. All their ETFs are tokenized.”

On Altcoins and Valuations

• The crucial debate is whether projects like Solana and Ethereum are over- or undervalued based on utility and future potential rather than pure speculation (16:06).
• Quote: “When we do the math, we end up bullish, but not 100x bullish... Some of these are real businesses.” (16:06)

On Indexing & Diversification

• Given the uncertainty of value accrual in the new tokenized world, the index approach is favored—own a broad basket of related assets (18:19).
• “Buy everything that's associated with it because you'll benefit no matter what happens. This was true in the early days of the Internet.” (19:12)

8. The Future of Tokenization

• Major financial institutions are moving toward on-chain tokenization of traditional assets.
• Open-source, global blockchains (Ethereum, Solana) are favored, though the final winners are still uncertain.
• Specialized chains and institutional/captive networks are being developed, e.g., Canton Network.
• Infrastructure expansion led to bandwidth glut, but adoption will likely catch up—classic technology cycle. (22:00)

9. Regulatory & Narrative Developments

• Proactive regulatory signals (e.g., BlackRock’s moves) considered extremely bullish.
• Announcement: BlackRock taking a strategic stake in Uniswap and stating intent to tokenize all its ETFs within 3–12 months (26:34).
• Matt (26:34): “Martin Small, their CFO, saying we're going to tokenize all of our ETFs in the next three to 12 months... There is no chance it's not happening.”

10. DeFi’s “Quiet” Strength

• DeFi protocols like Uniswap and AAVE performed reliably even through the industry’s crises (FTX, Celsius, etc.).
• Institutions will inevitably plug into DeFi for yield, validating decentralized financial rails for the mainstream (27:47, 28:09).

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Notable Quotes & Memorable Moments

• Matt Hougan (00:00): “Crypto retail entered full bear market. It hit its lowest level ever. It’s at 5... an asymmetric opportunity.”
• Scott Melker (13:41): “It’s depression for anybody who doesn’t have cash and it’s euphoria for everybody who does.”
• Matt Hougan (14:48): “Institutions love tokenization and stablecoins... It’s hard not to be bullish when you think about that world.”
• Matt Hougan (16:06): “The biggest question in crypto... is this valuation question. When we do the math, we end up bullish, but not 100x bullish.”
• Matt Hougan (18:19, 19:12): “Just buy everything that's associated with it because you'll benefit no matter what happens. This was true in the early days of the Internet.”
• Matt Hougan (26:34): “There is no chance it's not happening. That's the world we're going to be in. In 27 BlackRock's on Uniswap, all their ETFs are tokenized. It's hard not to be bullish when you think about that world, but the market isn't paying attention to it.”

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Key Timestamps

• [00:00]–[01:32] Institutions preparing to buy Bitcoin in bear market; why they’re not deterred by volatility
• [03:44]–[05:26] How institutions allocate, from first clients to broader groups; changes in regulatory environment
• [07:09]–[08:01] The different categories of institutional investors and their paces of adoption
• [10:00]–[11:38] Bitwise’s value proposition in the institutional market
• [13:12]–[14:34] Bear market psychology: despair vs. euphoria; why institutions see the opportunity
• [14:48]–[16:47] The narrative shift: from speculation to utility, focus on tokenization and stablecoins, questions of valuation
• [18:19]–[20:13] Indexing strategies for capturing tokenization, uncertainty of value accrual
• [22:00]–[23:03] Infrastructure cycles, current glut of blockspace, and the likely beneficiaries
• [26:34]–[27:47] BlackRock’s strategic moves, tokenization of all ETFs, and the undervaluation of DeFi
• [28:09]–[28:27] DeFi's robust performance as foundation for coming institutional wave

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Tone & Style

• Conversational, candid, and bullish yet analytical.
• Emphasis on patience, long-term thinking, and the divergence between Twitter-paced FOMO and slow institutional diligence.
• Mix of optimistic trend-spotting with pragmatic caution regarding valuations and timelines.

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Conclusion

This episode provides a comprehensive, inside look into how and why institutional investors are accelerating into crypto during the 2026 bear market. Key themes include disciplined allocation processes, the opening of advisory channels, regulatory momentum, and the foundational role of tokenization and DeFi for the next wave of adoption. Matt Hougan’s perspective is relentlessly constructive, emphasizing technology cycles, index investing, and an inevitability to mainstream crypto integration. The long-term outlook is unmistakably bullish—though, as both agree, the path will be slow and methodical, powered by infrastructure, utility, and conviction.

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Transcript

[A]

For the institutions that didn't allocate in 2024 or 2025, they're licking their chops. Crypto retail entered full bear market. It hit its lowest level ever. It's at 5 if you want to think about it. An asymmetric opportunity. Put five on a scale of one to 100. It's way over here. The average Bitwise client takes eight meetings before they allocate. We're about two years into the ETF boom, so they're like just now getting ready to allocate. It just moves not at a Twitter pace, it moves at a institutional pace. Eventually. Bitcoin ETFs I think will at some point have a trillion dollars of assets in them. They're not going to go down from here. Institutions love tokenization and stablecoins. We've talked about that before. They assume it's fait accompli. BlackRock's on Uniswap. All their ETFs are tokenized. It's hard not to be bullish when you think about that world. These are attractive on a ten year time horizon.

[B]

That's dope. You and I talk like once a week. It feels like that's right. You know, we gotta find new topic. But the first thing I want to talk about is a tweet I saw from Hunter which said effectively to butcher his. His words that you had a potential client I guess you've been talking to for two years. They decided to allocate. I think it was $11 million. And the conclusion was that institutions are more excited than ever now and they see this dip as an opportunity, not a problem.

[A]

That's absolutely true for the institutions that didn't allocate in 2024 or 2025. They're licking their chops. I know in Twitterland we're worried about this volatility. They're not surprised that crypto is volatile. Like wow, crypto is volatile. Right. They've been waiting for an entry point. They take their time. We had net inflows last week when the market was down sharply. I think institutions are the marginal buyer. I think they're going to continue to come into the market.

[B]

Do an institution like that where they just waiting for the risk manager to finally give them the green light or are they literally watching a chart and said 60 seems like my moment?

[A]

No, they're better lucky than good. You and I have talked about this before. The average bitwise client takes eight meetings before they allocate, which is brutal. But they meet quarterly. We're about two Years into the ETF boom. So they're like just now getting ready to allocate. It's actually just completely normal. It's the passage of time. Lucky them. They're buying at 60 and not 120. But I think it really is that amount. They're just, they wanted to allocate to this space, they finished their due diligence, they're ready to go and they happen to have a great entry point.

[B]

But these people have social media just like we do.

[A]

Right.

[B]

So they probably open X or do a search and they see the stories about the brutal bear market and massive outflows from institutions, which we could talk about. You're seeing inflows and actually outflows, I guess, writ large. How do they stay convicted when they haven't even touched the asset yet?

[A]

Well, I think they also look at that four year cycle. We're in the negative part of the four year cycle. But guess what the next three years look like in that chart. Right. They are looking ahead. These people are making allocations for the next five or 10 years. I think even if you talk to the most bearish, despairing person on crypto Twitter and you ask them where bitcoin will be in 10 years, they're going to be pretty bullish. I think that's the timeline that these people are moving on. So, yeah, again, they're not shocked that crypto is volatile. They know this is part of the thing and they're excited to take advantage.

[B]

So how do these people allocate, say this one, for example, I know you can't speak specifically about them. The $11 million they put in, is that the $11 million that they're putting in just generally or is this the first tenth of a position that they're building?

[A]

Yeah, so it's actually a great question. Usually this is a financial advisor who might have 100 clients. And typically what they do is they take their first 10 clients who have been asking them relentlessly about crypto for the last 10 years, and they allocate on their behalf. The big gain comes when they go from 10 to 100. And that's typically a second phase. I don't know in the case of this one group, if it was, they decided to do it across all their accounts. But most of the advisors who buy bitcoin do so for a handful of clients that have been talking to them about bitcoin. And then over time they broaden out to the wider community.

[B]

But it's interesting because there was a long time, sort of at the beginning of this institutional adoption when they were allowed to take incoming but weren't allowed to pitch their clients. Right. That's open now, correct?

[A]

It's just open as of Q4, at least for the major wirehouses. Yeah, yeah, we call it whether it's solicited or unsolicited. It was in the unsolicited camp, meaning they couldn't proactively talk about it. Now, three out of the four major wirehouses can proactively talk about it with clients. The fourth one will come on board soon.

[B]

So they're using those 10 customers as basically their test case, their crash test dummies, so to speak. Or they start to actually recommend it.

[A]

Actually, usually they start with themselves. So what we see is a pattern is the advisor themselves allocates, they hold it for about a year and then they allocate on behalf of those 10 clients and then they expand it out and then they go from 1 to 2 and a half to 5%. People are skeptical of this story. But I think if you ask yourself individually, like Scott, what was the first time you bought bitcoin? Have you bought bitcoin since then? Everyone has bought bitcoin since then. And the same thing will be true for this community.

[B]

Really, really interesting because what that says to me, there's, if there's some that you're just getting traction from now, could be a year for them to actually experience it themselves before that next ten, before the hundred. Which puts us on basically a just rising demand seemingly indefinitely.

[A]

It is a series of sequential waves. And then there are other people who are moving slower. Right. University endowments may meet with us once every six months or once every year. Insurance companies may meet with us once every six months or once every year. So there are this. It's not one institutional community. It's like 10 and they're all moving on the same path, just at different rates. It is a rising series of purchases. Look, you know, eventually Bitcoin ETFs, I think will at some point have a trillion dollars of assets in them. They're not going to go down from here. It just takes time.

[B]

So do they call you or do you call them?

[A]

Oh, we call them. Look, they reach out to us sometimes because they see us here, they read our memos. But we have a 25 person sales team. They're out there visiting people in the territory. They show up in bull markets or bear markets. And honestly, that's how you build trust, is you show up right now when the market is down, you explain why it's down. And you give a view on how it could recover. That's what they want to hear.

[B]

So from your perspective, what do you view as Actually, you kind of said they're different. Right. It's not all a monolith.

[A]

Yeah.

[B]

Institutions are. How do you sort of bucket them?

[A]

Sure, yeah. So RIAs, which are independent financial advisors, they're not tethered to a big corporation. Those are the first people to buy. They're already allocating in size something like 30, 40%, I think, are thinking about or buying Bitcoin.

[B]

Is that because they think for themselves?

[A]

They think for themselves, yeah.

[B]

They don't have Schwab saying, sell my product.

[A]

Usually they left. Exactly. Usually they left a large company where they got their business started to go independent because they wanted to make independent decisions. So those are the. The pointy tip of the sphere. The next is people who work at wirehouses and Morgan Stanley, Wells Fargo. They need the wirehouse to bless them, and then they can start learning. That process just started last quarter. Right. You also have family offices which are quasi independent, and they're moving pretty quickly. And then above that, you have true institutions. You have insurance companies, pensions, endowments, foundations, sovereign wealth funds, central banks, sort of in that order that I spoke. They'll move progressively slower, but we're going to get all the way down the stack. This is exactly what happened with ETFs. It's exactly what happened with every asset. It starts one place and it expands

[B]

throughout the whole stack at that level. Obviously, we've seen most of the big wirehouses come online. Are there any holdouts that we're not talking about? Vanguard was obviously the big one, and then there was announcement that Vanguard was going to allow it, but it seemed sort of vague. Yeah, it seemed like, call me maybe.

[A]

Yeah, yeah, that's exactly right. That's exactly right.

[B]

I don't know where they, where they stand on that.

[A]

Look, they're probably a hundred of these firms that matter. Probably 50 of them are fully open. 30 of them are conditionally open where you can do it on an unsolicited basis. 20 of them are still totally closed. So, yeah, there's still some. Some holdouts. They're not maybe as family names as Vanguard is. But again, all of this will change over time, and it's actually not normal. We in crypto are mad that it took the wirehouses two years.

[B]

They're fast. This is fast.

[A]

This is fast compared to how they move on everything else. It's just we're used to moving on a faster time. But make no mistake. It's just gonna happen. These are just financial exposures. People want them. The doors will open. They'll learn about them over time. It just moves not at a Twitter pace, it moves at a institutional pace.

[B]

So when we were talking, it's gotta be now, a year ago or more, we would constantly say, what percentage of people who want access to Bitcoin still can't get it?

[A]

Yeah.

[B]

Are those people still out there?

[A]

Yeah, yeah. No, no, no. I think those people are still out there. I think it may be 20% of wealth managers. It's still closed. Yeah. We're not 100% done. The door swings open slowly. It's swinging. The more conservative firms will get there. You saw Vanguard break a little bit. They're firms that are more conservative than Vanguard. And for sure the market volatility will slow that process down. So maybe it's 20, 25% are still closed, but we'll get it open.

[B]

Okay. There's a question I don't think I've ever asked you before. When you walk into a meeting, obviously they're probably meeting with Bitwise and maybe others.

[A]

Yeah, maybe.

[B]

Is that fair to say? I don't know, maybe you're.

[A]

Are there others?

[B]

No, not in my mind. What's the pitch for Bitwise specifically?

[A]

Yeah, so mostly it's, you don't have to sell against other people. Mostly it's a rising tide. If they're there and they like you and they trust you, then they will go with you. Really. The pitch is we're built to serve the advisor community. So there's no other crypto asset manager I know that has 25 full time salespeople that will show up in their office, that is a team of researchers that will answer any question that gets asked in 24 hours. We're sort of built to serve this advisor community. Other people are built to serve different communities. Just how we're architected, that usually wins. I could say we're 25% cheaper than BlackRock. I definitely say that. I could say that we donate to bitcoin core developers. I definitely say that. But in the end, these advisors want someone they can call. And that's sort of what Bitwise built its business to do.

[B]

Right. Initially, I remember us talking about the fact that part of the pitch was being crypto native and as you said, you know, giving money to bitcoin core and all those things. But I would imagine that as time passes and as the net is cast wider, the people you're talking to don't even know what that means they mostly

[A]

don't even know what. No, that's exactly right. They just want someone to trust. And you can imagine them making two different decisions. Look, I love BlackRock. You can imagine them trusting BlackRock, biggest name in asset management, incredible company. You can imagine them wanting to get any question they ask answered in 24 hours from experts in crypto. That's bitwise, right? Those are just both good choices. And you know, look, BlackRock's done very well. Our assets are up 15x since they joined the market. It's a rising tide. I'm happy about it.

[B]

But BlackRock doesn't have 25 people out there with charts and data pitching exclusively focused on crypto.

[A]

I don't think so. Maybe they do, but that's all we do 24, 7, 365. We do it in bull markets or bear markets. We're not going them to pitch them on AI or pitch them on bonds. It's, it's crypto only. We live and breathe it. We've done it for eight years. That has value for people. In any area of asset management, there's a specialist that wins the large share of the market. Right. If you want to do private equity, you're probably talking to Blackstone or kkr because specialists matter and bitwise is that specialist. That's sort of our calling card.

[B]

How much easier is the pitch when prices are going up than going down?

[A]

It's a little bit easier. It's a little bit easier. But again, if you're starting at zero, these prices are really attractive. I think I've been surprised in previous bear markets. In ftx, the bear market felt existential. People were worried that bitcoin was go

[B]

to zero, that we were dead or the industry would be gone.

[A]

In the United States in 2018, 2019, there was so much despair that there were those questions as well. And look, post fdx, that was actually reasonable, right? The infrastructure was collapsing and the regulator hated you. There was a non zero chance that it was just going to be a long, long winter. This winter doesn't feel like that. Right. Most people look at this as an attractive entry point. They don't see death and despair. They see the world getting more digital, they see rising concern about fiat currency, they see a four year cycle that would naturally mean we have a pullback and they think that's an attractive entry point. So I actually think it's a better bear market than 2022.

[B]

Well, it really just worries me. Do we need to all be giving up? And in the depths of Despair to put the bottom in.

[A]

Well, I will say, do I have

[B]

to get depressed and not want to anymore because I'm euphoric buying at these prices.

[A]

Well, look at the fear and greed index. I do think crypto retail entered full bear market. Right. It hit its lowest level ever. It's at five. Yeah. If you want to think about it, an asymmetric opportunity like put 5 on a scale of 1 to 100, it's way over here. So I do think there is that level of despair. It's just only in crypto retail, people who haven't bought yet. It's attractive, it's exciting.

[B]

Yeah. I was talking to Tillman Holloway earlier and he made a great point. He said it's depression for anybody who doesn't have cash and it's euphoria for everybody does. Which is an interesting way to frame it because if you've wanted to buy, I think it's fair to say that you'd rather buy $65,000 Bitcoin or 75 or 50 than 150.

[A]

That is, that is absolutely right. And look, a real thing that's true about bitcoin is that if you think it's worth a dollar, it's really easy to imagine it's worth $1 million. It's hard to, it's harder to argue the zero to one than it is one to a million. I think the world has accepted that it's, it's worth something. So I think the people are licking their chops at the ability to buy it at these levels. Doesn't mean we go straight back up. Bottoming is a process. But yeah, I like that framing if you have cash, it's closer to euphoria. These are, these are attractive on a ten year time horizon.

[B]

Okay, so we talked a lot about bitcoin but obviously there's a number of other products. How has the narrative, or I would say the bear market or winter affected the narrative for Eth Solana and the others that you're launching, have launched or looking to launch.

[A]

Look, it's really interesting right now actually I haven't talked about this much, but institutions love tokenization and stablecoins. You guys, we've talked about that before. They assume it's fait accompli. Right. So that market is going to be many trillions of dollars. The questions now are valuation focused? Is Solana at $50 billion overvalued or undervalued versus the opportunity? Is Ethereum at its current prices over or undervalued? So it's a really interesting. Dynamic institutions assume everything will be tokenized and effectively assume everything will move over. Stablecoins, they're max bullish. It's just are the valuations right? And I think that's actually a great question for crypto to answer.

[B]

Okay. So I've been actually thinking about that quite a lot. I think it's exceptionally positive that we get to a place where we fundamentally value things based on utility and usage like any other market. But if we're being honest, that also means that if they were previously valued or priced by speculation, could that actual floor price be much lower before they're able to capture upside?

[A]

Yeah.

[B]

Are they wildly overpriced because it was only speculators that bought them in the first place? I don't have a conclusion on that, by the way.

[A]

I think that's the biggest question in crypto. When you boil down all the bear market question, I think that's the question that mattered. Look, Bitcoin, it's easy to argue, right? Store of value, $30 trillion market, it's going to a million, Very easy on these other assets. I think this valuation question is the number one question to ask. When we do the math, we end up bullish, but not 100x bullish. I think that is the reality. Look, some of these are real businesses, like Chainlink is a real business. Solana has real GDP and real revenue. But the targets you end up with again are, are, are attractive. But it's not like it's not 100x.

[B]

It's not what people showed up for in 2017 and 2018.

[A]

No, it's a more mature market. But that's, that's the market we're in. Look, I still think it's probably more attractive than parts of the AI space which, where valuations have really soared. But we're going to get into like this odd part of being a value oriented crypto investor. I think that's going to be one of the themes coming out of the market.

[B]

Jordy Visser said the exact same thing yesterday.

[A]

There you go. I think it's real.

[B]

It is real. So having the conversations then we know that you have people finally allocating to bitcoin. Although I'm not sure Hunter's tweet specifically said it was a bitcoin. I think I just met in this market. I just assume it. Are you still having as many conversations about Ethereum and Solana, the early Bitcoin ETF buyers, are they now still, you know, saying it's time for me to take the next step or Is it kind of how retail is? Is that there's the shine off of all coins and still more of a focus?

[A]

So, yeah, it's an interesting question. So conversations are 5050 bitcoin and stablecoins and tokenization. So it's not Bitcoin and Ethereum and Solana, it's Bitcoin and Stablecoins and tokenization. And then there's the secondary question of how you play Stablecoins and tokenization. What we see there is people just don't know, which I think is fair. That's right.

[B]

Us being me, I guess.

[A]

Oh, me too. I don't know where the value going to accrue. And so what I think we're going to see is them just by companies that are building on that space and a suite of crypto assets that are building on this space. I don't think people try to pinpoint one or the other. I think they're going to sort of take a diversified approach to that Sounds

[B]

ripe for an index.

[A]

It does sound right for an index fund. I agree with that. But look, I think that's the right approach. Right. I don't know where value is going to accrue. Is it going to accrue to USDC or Coinbase or Robinhood or Ethereum or Tron or Solana? On stablecoin growth, you tell me. I think the jury's still out, right?

[B]

Yeah.

[A]

But our stablecoin is going to be bigger in 10 years than they are today, I think. Yeah, yeah.

[B]

This has been where I get stuck thinking about it every single time.

[A]

That's right.

[B]

It's like, I know stablecoins are going to be huge, but I don't know if Circle is priced correctly.

[A]

I think it's hard to sell.

[B]

It's because if interest rates come down massively, the revenue for stablecoins drops dramatically. They happen to be publicly traded. So, you know, Tether obviously will just do whatever Tether does. They only have 100 people, it doesn't matter. But if you're a publicly traded stablecoin, it's a great business. But is it a great business for a shareholder? Maybe, maybe not. I don't.

[A]

I think it's the greatest question. Look, stablecoins are going to create an enormous amount of value in the world. Right. They're an enormous, valuable technological innovation. They move faster, they move 24, seven, they're available globally. They can lower the cost of payments. A huge amount of value is going to be created. The question of where that value accrues, I think is a Great question. My view as an investor is just buy everything that's associated with it because you'll benefit no matter what happens. But this was true in the early days of the Internet, right? Was it infrastructure plays, was it apps? Was it the large caps, was it the small caps? The right answer there was to sort of buy everything and be kind of right. I think that's probably the right answer here.

[B]

I mean, we saw what happened to Ethereum when, I mean, Circle effectively went public and then Tom Lee. Tom Leed, Right. But he went on TV and he said, stablecoins are the next big thing. Ethereum is what you need to buy if you want exposure to stablecoins. Yeah, right. And I think anyone in the industry was like, I think stablecoins are kind of going to be everywhere and commoditized. And maybe it's not just Ethereum, but the narrative or the thought of that for investors set Ethereum on fire.

[A]

I agree with that for a while. Yeah. Well, narrative matters. Narrative matters. And these are, again, you have to think of this as like a series A startup. What are you looking for in a series A startup? You're actually not looking for high revenue, you're looking for growth of use and growth of revenue. That matters more. I'd rather have a fast growing thing than something that has a lot of revenue but is growing slowly. I think that's the right mental framework, but narrative will drive a lot of it. If people assume Ethereum is the play, Ethereum will do well for a while. Ultimately it'll peel back to this value, though.

[B]

When you think about everything being tokenized, do you think that it will largely happen on existing blockchains? Or you think we're just going to be hearing about JP Morgan, Coin and BlackRock Coin?

[A]

It's a big battle. It's a big battle. You can see right now the sort of mechanics of Wall street trying to capture that within its own blockchains and its own isolated areas. My bet is on open source, My bet is on global and diversified. But again, I think that's an uncertain bet. If you look at the history of technology, usually open and global wins, but not always. Sometimes the captive network dominates, sometimes there's regulatory capture. I think, I think, I think we'll find out, but I actually couldn't tell you which side of the ledger. My bet again, Ethereum Solana will be the backbone. That's actually my bet, but I think you can't be certain about it.

[B]

Interestingly as well, I think we had this period where there was a Fear in the early days that there wouldn't be enough block space for the billions. And then we got so much block space and so many blockchains, and now we're trying to scramble to fill it. But with that everything tokenized future. It feels like the pie might be big enough that everybody wins in some way, shape or form. It might not be as black and white as I presented it.

[A]

I totally agree. Look, it's a classic infrastructure build out. What always happens, there's always a shortage and then there's always a glut, and then it always fills up in the end. That's what happened with Internet bandwidth. That's what's happening with AI chips. There'll be a glut of AI capacity at some point for sure, and then AI will eventually suck it up. The interesting thing about crypto, we don't talk about that much, but you're right, we were bandwidth constrained. Now we have way too much bandwidth and eventually we'll fill it up with the $300 trillion of tokenized assets that are moving on chain. I think the big winners are likely to be the leaders right now. I think it's likely to be Ethereum, it's likely to be Solana. But you can't discount some of the more interesting new ideas. Right. You would can't discount what Canton is building.

[B]

That's. That one's the one that blew my mind.

[A]

Absolutely. And they're doing real revenue and they have real partnerships. They're very well run. You need exposure to that. You can't discount Layer Zero launching. Right. It's early. Right. It's early in any technological boom. When it's early, you can't be certain the leaders will ultimately win.

[B]

Yeah. When the DTCC made that announcement and Canton Networks Coin didn't move, it's like, you know, we're in a bear market. But then it moved.

[A]

It did.

[B]

It did. So it took a couple weeks for I think that to like register. I don't know if that's what did it, but it did finally move, which gave me some hope.

[A]

Yeah, well, that, that is the bear market, where good news is stored as potential energy but not recognized immediately. And you're seeing that as well, I mean, every day. Every day. I think Uniswap didn't move enough on the blackrock news. I think the. I think that is, you know, that is the pure sign that we're in a bear market. But there are these fundamental good things that are happening and yeah, Canton is a good example.

[B]

Do you think that the Chains will effectually effectively become like specialized, you know, like the chain for this, chain for that, or that certain kinds of institutions will adopt everyone.

[A]

I actually just don't know. I don't know. I think there's a good case for that to be made, but I think it's just an uncertain future. I keep coming, I know I keep shilling my index based background.

[B]

No, but I think I agree that's the approach.

[A]

That's why I make the joke that exactly right. The thing you're confident in or I'm confident in is tokenization. Right. Will be hundreds of trillions of dollars. Will it be specialized chains? Will it be a few chains? Will it be geographically located? Will privacy play a role here? How easy will it be to move across chains? I think all of that is uncertain at this point.

[B]

Well, in the last cycle and even before people would ask me what's the best way to invest in crypto? Right. They see you on and they want to know. And my answer was always effectively the index approach. But it was just buy the layer ones.

[A]

Right.

[B]

I said so I'm not going to catch the 100x metaverse coin or the 50x DeFi coin, but if it's on Solana and I own Solana, I might get a, you know, 25% bump or something. That's just the, that's the native crypto mentality that leads to indexing.

[A]

It's true.

[B]

Now you can include publicly traded equities or.

[A]

That's exactly right. I think, I think own the field. Look, Every investor probably 80 20s it, right? You need 20% that you're a degen and speculate on because we're humans and we all have views. I think you just need to bucket that as your 20% so it doesn't affect the 80% where we're just betting on crypto, Bitcoin, tokenization, stablecoins for the long haul.

[B]

Yeah. Vitalik recently made some comments that sort of set the Ethereum world on fire again as he tends to. To summarize, we don't need layer twos anymore. It's all going to be on the layer one. We're cheap or fast and that's where we're going to focus. Pretty big statement. What do you think?

[A]

Well, I think it's like the Steve Jobs moment returning to Ethereum for Vitalik. I think it's going to make Ethereum one of the leaders out of the bear market. I think it gives it narrative juice. I think it's the right thing for the chain to do. Look again. It's the same story. It really was constrained. Right. Remember when transactions were spiking to $100 each?

[B]

You try to mint a $10 NFT and it would cost 500.

[A]

It was stupid, right? It was stupid. And so they needed an emergency solution. The emergency solution was layer twos. They now don't need that.

[B]

What does that mean for layer Twos now though?

[A]

It means they're going to be ultra specialized and they're going to be more sovereign and. Yeah, and they'll try to. Maybe their market is smaller, but it is specialized. But that's just the nature of this market. And again, it really points to the unknowability at this early stage. But I do think it's going to make Ethereum one of the leaders. It needed a narrative push. Narratives contribute to leading you out of bear markets. It now has that like that Steve Jobs returning to Apple style idea. And I think it's going to. I think it's going to be one of the leaders.

[B]

I didn't have the BlackRock on Uniswap on my card. I mean, I mentioned it before, but they're.

[A]

That's a crazy thing. The even crazier thing to me was Martin Small, their CFO, saying we're going to tokenize all of our ETFs in the next three to 12 months. And I know that sounds like a long time in crypto Twitter, but if you're at a big bank, three to 12 months means it's basically done right. There is no chance it's not happening. That's the world we're going to be in. In 27 BlackRock's on Uniswap, all their ETFs are tokenized. It's hard not to be bullish when you think about that world, but the market isn't paying attention to it.

[B]

I don't know why I'm not buying Uniswap instead of talking to.

[A]

Exactly.

[B]

BlackRock literally had to buy Uniswap for this to happen, correct?

[A]

Yes. Yeah. They took a strategic stake in uniswap. This is probably just the first thing they're doing. They are not going to miss this train. Right. BlackRock, remember, missed the last big financial innovation, which was ETFs. They had to buy their way in. They bought iShares. They weren't a native ETF issuer. They're not missing this tokenization defi. I think DEFI assets in general are probably undervalued. I think AAVE is probably like, I know the tokenomics is not perfect. I think those can be fixed. I agree, but the usage and the growth, I think it's, you know, it's like 10x100x growth.

[B]

Yeah, because the institutions are going to plug into them inevitably for yield, of course. Not going to build their own defi protocols.

[A]

When these work, they don't need to.

[B]

And these worked through every collapse. It's like the untold stories of FTX and Celsius and Voyager and Blobfi was that it was orderly in defi, smart contracts worked, collateral was liquidated, people got their margin calls.

[A]

The 10:10 going, same thing. Yeah. I mean, these systems are incredibly robust. Right. Incredible uptime through massive volatility. And yeah, institutions, of course, institutional defi is going to be another one of the narratives that leads us out of this bear market. And I think people really underestimate the scale of it.

[B]

I needed my shot of Hogan bullishness today to get me going.

[A]

There you go.

[B]

I see it in the comments every time I have you on, they're like, that makes me so bullish. And then they're like, mcglone,

[A]

that's how I feel too. Every day that email comes in, I'm like, oh, yeah, yeah. But credit to him.

[B]

Oh, his, yeah, his email. Like, ma', am, how do you come up with these headlines? They make me depressed every morning. It's good. I need that shot as well, though. I think.

[A]

For sure, we all do.

[B]

Well, Matt, thank you, man.

[A]

Thank you, man.

[B]

It's a pleasure.

[A]

Super fun.