Bitwise CIO: Crypto’s ‘fascinating dichotomy’ offers opportunity

The contrast between institutional appetite and retail sentiment in crypto presents a massive opportunity, said Bitwise CIO Matt Hougan.

In a note to clients on Feb. 12, Hougan highlighted a “fascinating dichotomy” in crypto markets, referring to bullish institutional demand compared to bearish retail perception.

According to Hougan, bullish catalysts for digital assets are plentiful, driven by exchange-traded funds on Wall Street. Investors have allocated billions of dollars to products focused on Bitcoin (BTC) and Ethereum (ETH), with more crypto ETFs likely queued for consideration at the U.S. Securities and Exchange Commission.

Hougan argued that Donald Trump’s return to the White House has shifted Washington’s stance on crypto. Once a major adversary to blockchain, Capitol Hill has increasingly embraced digital assets in the early days of the Trump administration.

Lawmakers in the House and Senate have proposed stablecoin bills, while key Committees in both Chambers formed joint working groups to iron out crypto regulations.

Hougan also believes sovereign crypto adoption will eventually be reflected in market prices despite current retail skepticism. Although Bitwise’s proprietary on-chain sentiment chart showed a decline in retail expectations, he opined that the broader altcoin market outlook was “stronger than at any point in history.”

Retail investors have largely lamented major drawdowns while Bitcoin has reached several new highs. Hougan noted that the altcoin market lacked the spark seen in previous cycles, such as the initial coin offering frenzy of 2017 or the decentralized finance boom in 2021.

Although meme coins have temporarily boosted ecosystems like Solana (SOL), Hougan predicted that forthcoming U.S. crypto regulatory frameworks would refocus attention on altcoin fundamentals, fuel mass DeFi adoption, and increase institutional demand for blockchain technology.

“I smell opportunity. In a year or two, my guess is that you’re not going to have to squint to see the transformation in altcoins. The impact will be self-evident and overwhelming.” Hougan said, pointing to a violent repricing in the digital asset market later in 2025 or 2026.