Bitwise CIO: 2026 Will Be Very Strong; ICOs Will Make a Comeback

Podcast Source: Empire

Broadcast Date: December 8, 2025

Guest: Bitwise Chief Investment Officer (CIO) Matt Hougan

Compiled and Translated by: BitpushNews

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

In the episode, Matt engages in a deep discussion on key topics such as “Is the influence of the Bitcoin four-year cycle diminishing?”, “Accelerated institutional capital inflows”, “Is there a real risk of forced Bitcoin selling by Strategy?” and more. He also weighs in on the Haseeb–Santi debate regarding L1 public chain valuation, and shares his views on the next stage of crypto market growth drivers.

(The following is a summary of the interview content)

Q1: The market has been highly volatile recently, especially with major drops over the weekends. How do you see this?

Matt Hougan:

Short-term volatility doesn’t say much in itself, but over the past few months, we’ve definitely seen a pattern of “weekend panic mode.” Since the crypto market trades 24/7 year-round—and humans don’t stay awake all year—liquidity is naturally lower on weekends. In addition, significant macro policy announcements often come out on Friday afternoons, requiring the crypto market to price in the news in advance, which often gets amplified over the weekend.

So I don’t see this as a change in fundamentals. In fact, we’re talking about a market that is overall flat this year, but the sentiment is being amplified as if we’re experiencing a crash. A lot of investors are anxious now simply because of the memory that “bad things often happen on weekends.” This is not a signal of a long-term trend.

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

Matt:

I’ve said many times that I think the so-called “four-year cycle” has basically lost its effectiveness. It was valid in the past because of certain factors coming together, but those factors no longer have enough influence.

The supply shock from halving is impacting the market at a decreasing rate; the interest rate environment is completely different from the last two “cycle correction years” (2018, 2022)—now we’re in a rate-cutting cycle; and the “systemic blow-up” risk that triggered major corrections in past cycles has significantly decreased. In other words, the original forces that drove the cycle have all weakened.

But on the other side, one force is getting much stronger—institutional capital inflows. Over the past six months, traditional giants like Bank of America, Morgan Stanley, UBS, and Wells Fargo have all opened up to crypto asset allocation, with a total scale exceeding $15 trillion. This is a decade-level force, powerful enough to override the so-called four-year cycle.

So, to be clear: I don’t think 2026 will be a down year. On the contrary, I think it will be very strong.

Q3: You mentioned a lot of “old hand selling pressure” isn’t coming from on-chain addresses. Where is it coming from?

Matt:

Many OG holders haven’t sold directly over the past few years, so on-chain data doesn’t show “old wallets moving,” but they’ve engaged in another form of equivalent selling pressure: covered calls.

Put simply, they don’t want to sell Bitcoin they’ve held for years (due to high taxes), but they want to cash out some returns, so they pledge their Bitcoin to write options, earning an annualized yield of 10%–20%. This essentially sells future upside to the market, putting pressure on the price equivalent to partial selling, but it doesn’t show up on-chain as “old address moving assets.”

This business is growing very fast at Bitwise, and we’re not the only provider. I suspect the market now has billions of dollars’ worth of hidden structural selling pressure from this type of activity.

Q4: Is there really a risk that Strategy will be forced to sell its Bitcoin? Why is the market so concerned?

Matt:

There’s no need to worry at all. I actually think this is a misconception.

MicroStrategy’s annual interest expense is about $800 million, while it has $14.4 billion in cash on hand—enough to cover the next 18 months. Its debt is about $8 billion, but it holds Bitcoin worth over $60 billion. More importantly, its earliest debt doesn’t come due until 2027.

Unless Bitcoin price drops by 90%, there’s simply no scenario in which they’d be “forced to sell.” And if it does drop 90%, the entire industry will be worse off than MicroStrategy.

So the real issue isn’t “will they sell,” but “might they buy less than before in the future.” That’s the marginal impact to watch.

Q5: Which companies or institutions do you worry more about in terms of selling pressure?

Matt:
If we use the “missionaries vs mercenaries” model:

• Missionary type (like Saylor): Almost impossible to sell.
• Mercenary type (smaller companies copying MicroStrategy): Will exit in the future, but they’re too small—even if all of them sell, it won’t cause a systemic shock.

Q6: In your meetings with large financial institutions, what do they care about most?

Matt:

I spend a lot of time communicating with these institutions. The questions they ask are very basic: Why does Bitcoin have value? How do you value it? How does it correlate with existing assets? What is its role in a portfolio?

One key fact often gets overlooked: Institutional decision-making is very slow.
Bitwise’s average institutional client typically needs 8 meetings before they actually buy in—and sometimes those meetings are quarterly, so you can see why Harvard only just increased its Bitcoin allocation—they started researching the day the ETF launched and it took a year to approve it.

A giant like Bank of America manages $3.5 trillion in assets; even a 1% allocation is $35 billion, which is more than the net inflows of all current Bitcoin ETFs combined.

That’s why I say: Institutional adoption is the most important force in the market for the next few years.

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

Matt:
Because their goal isn’t to maximize portfolio returns, but:

“To avoid being fired by clients for losses.”

If an FA allocated client funds to Bitcoin in 2021, and the FTX crash in 2022 led to a 75% drop, the client would fire them immediately.
AI stocks like Nvidia could also fall 50%, but the market narrative is “future trend,” while crypto’s media narrative is still questioned—so the “getting fired risk” is higher.

But as volatility drops and narratives around stablecoins and tokenized assets (RWA) strengthen, crypto assets are becoming more “acceptable to professional advisors.”

Q8: How do you explain the differences between L1s like Ethereum and Solana to institutions?

Matt:
The strategy is simple:

1. First emphasize the differences (technical path, speed, cost, design philosophy)
2. Then recommend “buy a little of each”

The reason is that advisors only spend an average of 5 hours per week researching portfolios, and maybe only 3 minutes of that on crypto assets.

Matt says:

“If I only have three minutes a week to research crypto, there’s no way I can decide which chain will win. The most reasonable approach is diversified exposure.”

In terms of comprehensibility:

• Uniswap and Aave are the easiest to understand, as they’re “decentralized Coinbase” or the “crypto version of a lending bank”
• Chainlink is also very popular with institutions, because you can simply say:

“Chainlink is the Bloomberg data terminal of the blockchain world.”

Q9: What’s your take on the Haseeb vs Santi debate over L1 valuation?

(Bitpush Note: **Haseeb Qureshi is a partner at crypto VC firm Dragonfly Capital, representing a more long-termist view, arguing that the market seriously underestimates the future transaction volume and network effects of public chains (L1s), and that current valuation models miss long-term potential.
Santi Santos is a crypto investor and researcher, representing a more traditional finance, rational valuation perspective, emphasizing that public chains must ultimately be valued on revenues, fees, and real economic value, and that some current L1s are overpricing future expectations.)**

Matt:

I think both of them are right in a sense, but they have different focuses.

From a long-term structural perspective, I’m actually closer to Haseeb’s view. We’re being too conservative about on-chain transaction volume, economic activity, and asset settlement frequency. For example: why is payroll every two weeks? It could be hourly or even by the minute—and that shift would mean on-chain transaction volume grows exponentially.

But I also agree with Santi: Ultimately, all L1s must be valued using real economic metrics. Income, fees, protocol value capture—these can’t be ignored. It’s just that the financial data we see now is nowhere near enough to reflect future network scale.

I’d sum it up this way—
Valuation will ultimately be based on financial performance (Santi is right), but the future economic scale will far exceed current models (Haseeb is right).

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

Matt:

I think crypto projects are moving from a “pure community narrative era” to a “quasi-public company era.” This means teams need to learn mature practices from traditional capital markets, such as:

• Regularly publishing transparent operational and financial data
• Holding quarterly update calls
• Building an investor relations (IR) team
• Clearly explaining the protocol’s revenue, economic model, and long-term vision

Many foundations overfunded in recent years and have not used capital efficiently. I believe project teams should manage the treasury as a real investment portfolio, like Arbitrum does, not just as a short-term subsidy mechanism.

These aren’t just formalities—they’re proven communication methods in capital markets for over a century.

Q11: How do you think ICOs and token issuance models will change in the future?

Matt:

I’ve always thought the 2017 ICO boom was “premature but correct”—the idea itself wasn’t wrong, just that economic models weren’t mature and regulation was unclear, so many projects couldn’t deliver on their promises.

In the future, I believe ICOs will come back, and at a much larger scale than in 2017. Compared with traditional IPOs, ICOs are faster, more democratic, and lower cost. The current regulatory environment allows tokens to be directly tied to protocol economic activity, giving tokens real economic value.

In the long run, I even think company fundraising will gradually shift from IPOs to native token issuance, or a fusion of the two.

Q12: What do you think about the institutional landscape for privacy coins like Zcash?

Matt:
The narrative for Zcash is very clear, but regulators are still sensitive, especially regarding the compliance debate over “default privacy vs optional privacy.”
So it’s hard for ETFs or institutional products to touch Zcash.

However, he emphasized:

“In the future, crypto will expand from one narrative to ten, and privacy will be one of them.”

It’s just not the right time for institutions to deploy into privacy assets yet.

Q13: What’s your final take on 2026?

Matt Hougan:
I think 2026 will be very strong. Institutional inflows are accumulating momentum, the regulatory environment is shifting from headwinds to tailwinds, and new narratives like stablecoins, asset tokenization, and on-chain finance are spreading. The market may get disappointed in these narratives at times, but that’s just a matter of timing, not direction.

In a nutshell:
We’re just standing at the entrance to the next huge growth cycle.