Bitwise Chief Investment Officer Matt Hougan predicts more than 100 cryptocurrency exchange-traded products will launch following recent government regulatory shifts, despite digital assets experiencing significant price declines. Bitcoin dropped below $90,000 for the first time since April, falling from its peak of approximately $126,000 in early January.
What to Know:
- Bitwise anticipates over 100 new crypto ETF launches as regulatory environment shifts under current administration
- Bitcoin has fallen nearly 30% from its January high of $126,000 to below $90,000 this week
- Bitwise's Solana Staking ETF, launched October 28, has declined 27% despite Tuesday's 9% rebound
Wave of Crypto Investment Products Expected Despite Market Downturn
Hougan described the anticipated regulatory changes as "ETF Palooza in Cryptoland" during an appearance on CNBC's "ETF Edge" Monday. The investment executive expects the market to expand significantly beyond single-asset products.
"We're going to see a lot of single asset crypto ETPs [exchange-traded products]," Hougan said. "What I'm most excited about, though, is the growth of index based crypto ETPs."
His firm projects substantial growth in the sector.
"This industry will be 10 times bigger than it is today," Hougan stated.
The optimism comes as cryptocurrency markets face pressure. Bitcoin's decline represents a nearly 30% drop from its peak price. Hougan's own firm launched the Solana Staking ETF on October 28, which has lost 27% of its value since inception, though it gained 9% Tuesday.
Targeting Diversified Crypto Investors Through Index Products
The passive fund holds only Solana and stakes nearly all of its SOL on-chain, pledging tokens to help validate transactions and secure the network in exchange for ongoing rewards similar to interest, according to the firm's website. Those rewards flow back into the portfolio.
Hougan identified index-based products as the year's most significant development for cryptocurrency investing. He said these products target what he calls "the next buyer of crypto" — investors seeking small portfolio allocations without strong preferences between individual assets.
"They don't necessarily have an opinion on Ethereum versus Solana or Bitcoin versus another asset," he said. "They just want to buy a broad swath of the crypto market and hold it for the long term."
Tom Lee, head of research at Fundstrat Global Advisors and a CNBC contributor, echoed the positive outlook during the same interview. Lee, a long-time Bitcoin advocate, attributed the favorable environment to the Trump administration's approach.
"Experimentation and innovation are being encouraged by this administration," Lee told "ETF Edge."
The cryptocurrency industry has long sought expanded access to traditional investment vehicles. Index products could provide broader market exposure without requiring investors to select individual digital assets. These products would function similarly to stock market index funds, offering diversified holdings across multiple cryptocurrencies.
Market Volatility Tests New Investment Products
The recent price declines highlight the volatility inherent in cryptocurrency markets. Bitcoin's fall below $90,000 marks a significant retreat from its January highs, testing investor confidence in newly launched products. Industry executives maintain their long-term outlook remains positive despite current market conditions.