Bitwise CIO: Next Bull Run Will Be Slower, Less Volatile
In brief
- Bitwise CIO Matt Hougan predicts slower, less volatile next bull run than previous cycles
- Wall Street gravitating toward stablecoins and tokenization as tangible alternatives during downturns
- Stablecoin market cap hit record $322 billion, Citi projects $4 trillion by 2030
- Bitcoin down 26% year-to-date, nearly 50% below October record high
Institutional appetite reshaping crypto recovery
Hougan attributed slower crypto recovery to Wall Street investors and advisory firms focusing on real-world applications such as tokenization and artificial intelligence rather than straight digital assets. The shift marks a departure from prior bull runs, where retail-driven momentum and speculative fervor dominated price action.
Yet registered investment advisors remain highly engaged with bitcoin and crypto overall. Interest is as high as it has ever been, according to Hougan's assessment of the advisory community.
Stablecoins and real-world assets gain traction
Interest in stablecoins is growing, with the combined market value recently hitting a record high of $322 billion. The tokens—whose value is pegged to real-world assets like the U.S. dollar—are becoming the bridge between traditional finance and crypto for institutional players seeking stability.
Citi projects the value of stablecoins could peak at $4 trillion by 2030, signaling the scale of institutional capital potentially flowing into the sector. Real-world asset perpetual futures volumes have already begun reflecting this shift, rising 10.4% in May to hit a new all-time high.
Market headwinds persist
The broader crypto market has faced headwinds this year. Bitcoin's price remains almost 50% below the record high it hit in October and is down 26% this year. The CoinDesk 20 Index has lost 34% this year, reflecting weakness across the broader market.
In May, combined exchange volumes fell 3.45% to $4.41 trillion, the lowest since September 2024, indicating reduced trading activity as uncertainty persists.
Despite the near-term pressure, Hougan remains a long-time bitcoin bull. He predicted bitcoin will go north of $1 million in the next 10 years—a view that reflects confidence in crypto's long-term institutional adoption even if the path forward is slower and more deliberate than traders expect.
Frequently asked questions
Why will the next bull run be slower than past ones?
Wall Street investors and advisory firms are now focused on real-world applications like tokenization and AI rather than speculative digital assets. This shift toward tangible use cases creates a more measured recovery pace compared to prior cycles driven by retail momentum.
What are investors reaching for instead of bitcoin during bear markets?
During bear markets with doubts swirling, investors find it easier to reach for stablecoins and tokenization as more tangible alternatives. These assets are perceived as more 'real-world' and tied to actual value compared to bitcoin.
How large is the stablecoin market now, and how big could it grow?
The combined market value of stablecoins recently hit a record $322 billion. Citi projects the value could peak at $4 trillion by 2030, reflecting significant institutional capital flowing into the sector.
