Bitwise Chief Investment Officer Matt Hougan has publicly defended former President Donald Trump's 2025 executive order that allows cryptocurrency to be included in U.S. 401(k) retirement plans. Hougan argued that restrictions on Bitcoin in retirement accounts are "ridiculous" and inconsistent, especially when compared to the volatility of traditional equities.
Hougan highlighted that Bitcoin exhibited less volatility than Nvidia stock in 2025. He noted that while Nvidia stock swung 120% between April and October 2025, Bitcoin rose 65% from $76,000 to $126,080 in the same period. "This is just another asset," Hougan stated, emphasizing a perceived double standard where riskier equities face no such bans in retirement portfolios.
The potential capital inflow from 401(k) plans is massive. The retirement plan institution manages roughly $12.2 trillion. Hougan pointed out that even a modest 1% allocation could direct approximately $122 billion into the crypto market, with financial advisors often recommending allocations of 2.5%-3%. He expects potential inflows to arrive later this year, albeit slowly, due to the nature of these large institutions.
This development could greatly benefit major ETF providers like BlackRock and Fidelity, the largest providers of retirement plans. As of now, BlackRock's IBIT ETF has recorded approximately $62.3 billion in cumulative inflows, while Fidelity's FBTC has recorded $11.8 billion. Overall, Bitcoin ETFs have a cumulative net inflow of $56.5 billion with total net assets of $118.6 billion, representing roughly 6.5% of Bitcoin's total supply.
However, the move faces political opposition. U.S. Senator Elizabeth Warren sent an open letter to the SEC on Monday, demanding answers by January 27 regarding how the regulator assesses volatility and manipulation in crypto markets. Warren warned that crypto in 401(k)s could lead to high fees and investor losses, stating, "Their 401(k) represents a lifeline, not a playground for financial risk."
Hougan also commented on broader market dynamics. He believes the passage of the Digital Clarity Act would provide a clear regulatory framework, attracting more institutional capital and potentially pushing the market to new all-time highs. He estimated this could attract at least $10 billion into the crypto landscape. Furthermore, Hougan disclosed that Bitwise is planning to launch index-based exposure ETFs that combine multiple crypto tokens.
Despite a bullish long-term forecast where he sees Bitcoin potentially pushing over $200,000, Hougan offered a nuanced view on Bitcoin's classic cycle. He stated that 2026 will be a 'negative' year for Bitcoin, attributing this to the diminishing significance of Bitcoin's halvings, low new production, and falling interest rates. He predicted the traditional 4-year cycle will be "broken" in 2026 and replaced by a "10-year grind."
The market also faces uncertainty from an unrelated investigation. The Department of Justice is investigating Federal Reserve Chair Jerome Powell, led by Jeanine Pirro. Powell defended the Fed's independence, stating the threat of criminal charges stems from setting rates based on public interest rather than political pressure.
