The optimistic case for crypto in 2026, with Bitwise CIO Matt Hougan
Watch on YouTube ↗  |  February 16, 2026 at 16:23 UTC  |  36:51  |  The Block
Speakers
Tim Copeland — Host
Matt Hougan — Bitwise CIO

Summary

  • Current Market Cycle: As of February 2026, the crypto market is in a "classic winter" (Year 4 of the cycle). Retail has capitulated, but institutions are actively building.
  • Bifurcated Market: A sharp divide exists between "Institutional Assets" (Bitcoin, Ethereum) which have ETF support, and "Everything Else" (Alts/L1s) which are down ~70% and suffering from lack of inflows.
  • BlackRock's Aggression: BlackRock is not just participating; they are integrating. They plan to tokenize all ETFs within 3-12 months and have explicitly aligned with Uniswap (buying UNI tokens).
  • Contrarian MSTR View: Hougan disputes the consensus that MicroStrategy will be a forced seller of Bitcoin. He argues they have sufficient cash flow for debt service and will remain net buyers.
  • Prediction Markets: Expected to grow substantially through the 2028 election, with traditional exchanges (CME) entering the fray.
Trade Ideas
Ticker Direction Speaker Thesis Time
BTC /ETH
LONG Matt Hougan
CIO, Bitwise Asset Management
Hougan states that institutional investors (BlackRock, etc.) "don't have time" to research deep-tier assets. They are allocating strictly to the top two assets via ETFs. In a bear market ("crypto winter"), liquidity consolidates into quality. While retail flees, institutional inflows are "papering over" the weakness in BTC and ETH, creating a floor that smaller assets lack. LONG. These are the only two assets with structural institutional bids in 2026. Global recession or a reversal of the "Clarity Act" regulation could halt institutional flows. 0:17
BLK /UNI
LONG Matt Hougan
CIO, Bitwise Asset Management
BlackRock bought UNI tokens, listed Bidd on Uniswap, and the CFO stated they plan to tokenize *all* ETFs in 3-12 months. This is a "fat accompli." BlackRock is effectively underwriting Uniswap as the infrastructure for future financial rails. BLK benefits from the asset management fees of tokenized products, while UNI benefits from the legitimacy and volume of institutional DeFi usage. LONG. A play on the convergence of TradFi (BLK) and DeFi (UNI). Regulatory crackdown on DeFi protocols requiring KYC (though BlackRock's "Bidd" is permissioned, mitigating this). 12:32
AVOID Matt Hougan
CIO, Bitwise Asset Management
Hougan notes that assets without ETFs (specifically naming Sui and Avalanche) were down 70% in 2025 and are "down even more in 2026." Institutional capital is the only active buyer in this market. Since institutions are not buying "secondary assets" (Alts), and retail has already sold off, there is no marginal buyer for these L1s until the cycle fully turns. AVOID. These assets are "zombies" until retail interest returns or they gain ETF approval. A sudden "Altseason" triggered by a specific app breakout or unexpected regulatory approval for an Alt-ETF. 5:05
LONG Matt Hougan
CIO, Bitwise Asset Management
The market fears MicroStrategy will be forced to sell BTC to cover obligations. Hougan counters: "They have enough cash to pay the dividend on their preferreds... I don't think they'll be selling Bitcoin." The market is pricing in a "forced liquidation" discount. If MSTR simply holds (or continues buying as Hougan predicts), that discount will unwind as the fear dissipates. LONG (Contrarian). Betting against the "forced seller" narrative. Bitcoin price dropping below $50k for an extended period (3+ years) could eventually stress their balance sheet.
CME
LONG Matt Hougan
CIO, Bitwise Asset Management
Prediction markets are booming, and traditional finance is catching up. Hougan explicitly mentions CME is "now doing its own prediction markets." Prediction markets are gaining mass adoption (Uber-style trajectory). As regulatory clarity improves, regulated incumbents like CME are best positioned to capture institutional volume in this new asset class, stealing share from offshore/crypto-native platforms. LONG. A regulated way to play the growth of the prediction market sector. Strict US regulations banning election betting or prediction markets entirely. 21:48
LONG Matt Hougan
CIO, Bitwise Asset Management
Hougan identifies "AI agents using DeFi and stablecoins to transact" as a major narrative meta for 2026. AI agents cannot use bank accounts; they require programmable money. This creates a structural, non-speculative demand for stablecoins and the DeFi rails that support them. LONG. Invest in the infrastructure (Stablecoin issuers, DeFi protocols) that AI agents will utilize. The technology for autonomous AI transactions may take longer to mature than the narrative suggests. 31:19