Nikolas Sargeant
Traditional investors have not yet recognized the potential impact cryptocurrency technology may have on financial markets, creating an opportunity to invest before the sector's eventual maturation, according to Bitwise Chief Investment Officer Matt Hougan.
"Everywhere I look, Wall Street is screaming that finance is moving on-chain. Not a little of it; all of it," Hougan stated in a Tuesday note. "Yet traditional investors can't hear it."
Hougan argued investors suffer from "anchoring bias," remaining fixated on cryptocurrency's early-stage perception when the technology was primarily associated with cypherpunks and dark web markets. "They look at crypto and still see a punk skateboarder with tattoos. They don't realize he's shaved, put on a suit, and is deploying infrastructure that will underpin the next generation of capital markets," he stated.
Major finance companies have launched or are experimenting with cryptocurrency technology facets, mainly tokenization and stablecoins, spurred by US regulators and lawmakers moving to support the sector.
Cryptocurrency investors are also not recognizing the current shift, having witnessed traditional institutions take passing interest in the space previously. "They're suffering from 'the boy who cried wolf' syndrome," Hougan said. "They've heard the promises of institutional adoption for so long that they no longer register."
Major finance players have begun moving onchain with regulatory backing, particularly the Securities and Exchange Commission's "Project Crypto," launched in July to "enable America's financial markets to move on-chain." The value of tokenized assets on blockchains, including US Treasuries and commodities, has approached $20 billion, more than quadrupling throughout 2025.
"The numbers in question are enormous," Hougan stated, noting hundreds of trillions of dollars in exchange-traded funds, stocks, and bonds means the tokenization market "can grow 10,000x and still have room to grow." BlackRock and credit manager Apollo have launched tokenized funds worth billions, while major banks including JPMorgan, Bank of America, Citigroup, and Wells Fargo are reportedly discussing stablecoin initiatives.
