Matt Hougan, Chief Investment Officer at Bitwise Asset Management, has issued a stark warning to clients, arguing that the cryptocurrency market may be structurally undervalued due to a significant disconnect between investor perception and the accelerating pace of institutional adoption of blockchain technology.
In a detailed memo, Hougan attributes this mispricing to anchoring bias, a behavioral tendency causing investors to view the market through outdated frameworks shaped by historical scandals like Silk Road (2013) and the Mt. Gox collapse (2014). "There is a large gap between what investors think is happening in the crypto world and what is actually happening," Hougan wrote, suggesting this distortion prevents recognition of current structural changes.
The memo highlights a series of major institutional moves that signal a profound shift. BlackRock CEO Larry Fink declared markets are at "the beginning of the tokenization of all assets," with the firm subsequently launching its tokenized Treasury bond fund BUIDL on Uniswap, now holding over $2 billion in assets, and investing in the UNI token. Credit giant Apollo, managing $700 billion, has tokenized its Diversified Credit Fund across six blockchains and acquired a stake in lending protocol Morpho.
Furthermore, JPMorgan launched a deposit token on Coinbase's Base network (an Ethereum Layer 2), while it, along with Bank of America, Citigroup, and Wells Fargo, is exploring a joint stablecoin initiative. Hougan contextualizes the potential by contrasting the $20 billion total tokenized asset market against traditional finance scales: ETFs ($30 trillion), equities ($110 trillion), and bonds ($145 trillion), implying a growth runway of up to 10,000 times if tokenization becomes widespread.
Despite this activity, Hougan acknowledges open questions about which networks—public chains like Ethereum and Solana or quasi-private ones like Canton Network—and which players will capture the value. "The honest answer to most of these questions is: nobody knows yet," he stated. However, he concludes that building broad exposure before the market corrects its perception represents the greatest available source of alpha today.
