Bitwise CIO Matt Hougan spent last week on calls with more than 40 financial advisors at major institutions, and the conversations kept circling back to the same theme: stablecoins and tokenization, not Bitcoin.
“It was pretty hard to engage with advisors on Bitcoin this week,” Hougan wrote in a note published Wednesday. The advisors Hougan spoke with remain interested in crypto broadly, but their curiosity has shifted decisively toward what he called “the real-world applications of crypto that are quickly reshaping everything from capital markets to global payments.”
That pivot comes as Bitcoin trades around $62,500, down nearly 30% year-to-date. The advisors Hougan described aren’t abandoning crypto. They’re reweighting their attention toward the parts of the ecosystem where they see clearer near-term utility.
The Stablecoin Hype Cycle Reaches TradFi Desks
Hougan’s observation reflects a broader pattern across Wall Street. Turn on CNBC, he noted, and you’re likely to hear SEC Chair Paul Atkins, Goldman Sachs CEO David Solomon, or BlackRock CEO Larry Fink discussing stablecoins and tokenization. That media presence has filtered down to the advisor level.
The stablecoin market has grown into a multi-hundred-billion-dollar infrastructure layer for crypto, but it’s also becoming a point of entry for traditional finance players who may never have cared about Bitcoin’s monetary properties. Circle’s 2025 IPO crystallized that shift. The company behind USDC debuted at $31 per share and rocketed to $240 at its peak before the broader crypto stock selloff pulled it back to around $79.
That trajectory, from buzzy debut to significant retracement, mirrors the volatility of the assets Circle’s stablecoin is meant to stabilize against. But the fact that Circle could go public at all, and that its stock briefly commanded a valuation rivaling some mid-cap banks, signals how seriously Wall Street now takes stablecoin infrastructure.
For advisors at large wealth management firms, stablecoins offer a more comfortable entry point than Bitcoin. The pitch is simpler: these are digital dollars that move on blockchain rails. There’s no need to explain proof-of-work, halving cycles, or the Austrian economics that underpin Bitcoin maximalist arguments. Stablecoins just look like a faster payment system with programmable features.
Tokenization Gets Regulatory Tailwinds
Tokenization attracted even more advisor attention during Hougan’s conversations. The SEC is reportedly planning to allow tokenized stock trading, a development that could remove one of the main barriers to institutional participation: the perception that crypto assets exist in a regulatory gray zone.
If the SEC greenlights tokenized equities, traditional investors gain a familiar wrapper around blockchain technology. They’re not buying a speculative asset; they’re buying Apple or Tesla, just in a format that settles faster and trades 24/7. That framing matters enormously for compliance departments and risk committees that have historically viewed crypto with suspicion.
Crypto exchanges have already moved to capitalize on this demand. Bybit and others have rolled out tokenized stock offerings outside the US, and those products have found demand from investors who want exposure to high-profile listings like SpaceX’s planned IPO. Moomoo’s recent push into crypto illustrated the same thesis from the retail side: traders want Wall Street-grade tools and familiar asset types, not necessarily more exotic tokens.
The potential for tokenized Treasuries also factors into advisor interest. JPMorgan’s Ethereum-based treasury fund filing earlier this year targeted GENIUS Act compliance, positioning tokenized government bonds as reserve assets for stablecoin issuers. That kind of institutional plumbing connects stablecoins and tokenization into a single narrative that advisors can explain to clients without venturing into speculative territory.
Bitcoin’s Narrative Problem in a Down Market
Why has Bitcoin become the harder sell? Part of the answer is simple price action. A 30% drawdown concentrates attention on whatever isn’t working. But Hougan’s framing suggests something deeper: Bitcoin’s use case is harder to articulate when advisors are looking for near-term applications they can connect to their clients’ existing portfolios.
Bitcoin’s pitch as digital gold or an inflation hedge has always been abstract compared to “this stablecoin settles cross-border payments in seconds” or “this token represents a share of Tesla that trades on weekends.” In a market environment where Bitcoin has struggled to hold momentum, the abstract pitch faces more skepticism.
The irony is that Bitcoin’s recent underperformance may be exactly what Hougan’s “leading indicator” thesis predicted. Bitwise’s earlier analysis suggested Bitcoin acts as a canary in the coal mine for broader risk-off moves, repricing before traditional equities follow. If that model holds, Bitcoin’s current weakness isn’t a sign of permanent disinterest but rather an early signal of macro stress that hasn’t fully materialized in other asset classes.
The advisors Hougan spoke with, though, aren’t necessarily playing that macro game. They’re looking for products they can recommend to clients with straightforward compliance and clear utility. Stablecoins and tokenized assets check those boxes in ways Bitcoin still struggles to.
The Names That Came Up Instead
Hougan listed specific projects and companies that advisors mentioned during his conversations. Ethereum and Solana appeared as the blockchain platforms most discussed, likely because they’re the infrastructure layers where stablecoins circulate and tokenized assets will settle. Canton, Chainlink, and Avalanche also came up, each offering different approaches to enterprise blockchain adoption or cross-chain interoperability.
On the company side, advisors showed interest in Hyperliquid, the perpetuals trading platform that has gained significant market share in crypto derivatives. Figure, the blockchain-based lending company, and Circle were also mentioned alongside Coinbase.
That list reveals the specific flavor of crypto exposure advisors are considering. It’s not meme coins or Layer 2 plays or DeFi yield farming. It’s infrastructure, payments, and trading platforms, the pieces of the ecosystem that most resemble traditional finance business models.
Coinbase’s own strategic evolution reflects this shift. The exchange has been expanding into business lines beyond spot crypto trading, positioning itself as an infrastructure provider for institutions that want blockchain exposure without direct asset custody. If advisors funnel client capital into stablecoin and tokenization plays, Coinbase stands to benefit as the on-ramp rather than competing directly with Bitcoin as an investment thesis.
What Pulls Crypto Out of the Slump?
Hougan’s note carried an optimistic undertone despite the Bitcoin-skeptical observations. His theory: crypto bull markets have historically been triggered by “new product breakthroughs and new types of investors.” Stablecoins and tokenization could provide both.
The new product breakthrough is already underway. Tokenized Treasuries, tokenized equities, programmable stablecoins for institutional payments: these aren’t theoretical anymore. They’re either live or approaching regulatory approval. If the SEC follows through on allowing tokenized stock trading, that single development could unlock significant institutional capital.
The new investor class Hougan envisions is precisely the financial advisors he’s been speaking with. These aren’t crypto-native funds or Bitcoin believers. They’re wealth managers at traditional firms who need compliant products that fit existing allocation frameworks. Stablecoins and tokenized assets slide into those frameworks far more easily than a volatile, un-yielding asset like Bitcoin.
The question, then, is whether capital flowing into stablecoins and tokenization eventually circulates back into Bitcoin and other crypto assets. Historically, new money entering crypto through one door has tended to explore other rooms. An advisor who gets comfortable recommending a tokenized Treasury product may eventually consider a spot Bitcoin ETF for a client seeking uncorrelated returns.
But that pathway isn’t guaranteed. Stablecoins and tokenized assets could become their own silo within traditional finance, offering blockchain efficiency without exposure to crypto’s characteristic volatility. In that scenario, the “crypto” label becomes a legacy term for a specific set of speculative assets, while stablecoins and tokenized securities get absorbed into mainstream capital markets vocabulary.
The 30% Drawdown in Context
Bitcoin’s current price around $62,500 represents a significant pullback from its highs, but worth mentioning: where that leaves the asset relative to its history. A 30% year-to-date decline is painful for anyone who bought near the top, but Bitcoin has experienced drawdowns of 50% or more multiple times during its existence. The current slump, while uncomfortable, doesn’t represent an existential crisis for the network or its long-term investment thesis.
What it does represent is a window where competing narratives can gain ground. When Bitcoin is rallying to new highs, it tends to dominate crypto conversation through sheer momentum. The “number go up” dynamic attracts attention and capital regardless of underlying utility questions. During drawdowns, those utility questions resurface, and stablecoins and tokenization offer clearer answers.
Hougan’s observation about advisor sentiment should be read in that context. It’s not that these 40+ advisors have permanently abandoned Bitcoin. It’s that they’re currently more interested in parts of the crypto ecosystem that make sense to them right now, given current prices and regulatory developments. If Bitcoin recovers and regulatory clarity around ETFs improves, that attention could shift again.
The difference this cycle might be that stablecoins and tokenization have matured enough to retain institutional interest regardless of Bitcoin’s price action. Circle’s public stock, JPMorgan’s tokenized Treasury fund, the SEC’s reported openness to tokenized equities: these developments create institutional infrastructure that doesn’t depend on Bitcoin’s momentum. That infrastructure could serve as a more durable foundation for traditional finance participation in crypto, even if it means Bitcoin loses some of its centrality to the narrative.
For the 40+ advisors Hougan spoke with, that’s probably fine. They’re not ideologically committed to Bitcoin’s success. They’re looking for products that serve their clients and fit their compliance requirements. Right now, stablecoins and tokenization fit that bill better than Bitcoin does.
Related Reading
- GENIUS Act: what it means for stablecoins
- DeFi yield farming: the beginner’s walkthrough
- Institutional Adoption news
- More on Bitwise
- More on Stablecoins
