Bitwise CIO: Wall Street goes on-chain as skepticism lingers

In a recent note, Bitwise Chief Investment Officer Matt Hougan argued that Wall Street firms are shifting key functions to blockchains even as many investors remain skeptical. He pointed to the Securities and Exchange Commission’s “Project Crypto,” roughly $20 billion in tokenized assets, tokenized funds from BlackRock and Apollo, and discussions among major U.S. banks about a shared stablecoin.

“Everywhere I look, Wall Street is screaming that finance is moving on-chain. Not a little of it; all of it,” he wrote. “Yet traditional investors can’t hear it.”

Hougan said many investors are anchored to early views of crypto, when it was tied to niche communities and gray‑market use. He argued they still see it as a fringe, risky scene rather than a tool mainstream finance can use. In his view, the industry has matured and is now building infrastructure that could support the next generation of capital markets.

He added that some crypto-native investors discount these developments because institutions have floated plans before without follow-through. “They’re suffering from ‘the boy who cried wolf’ syndrome,” his note stated.

Hougan referenced an SEC effort he called “Project Crypto,” which he described as launched in July “to enable America’s financial markets to move on-chain,” attributing that description to Paul Atkins. He put the value of tokenized assets on public blockchains at about $20 billion and wrote that it more than quadrupled over 2025.

Tokenization refers to issuing traditional assets, such as U.S. Treasurys and commodities, as digital tokens on a blockchain. Proponents aim for faster settlement, longer trading hours, and more automated record-keeping and compliance. Hougan argued the addressable market is large given the scale of exchange-traded funds, stocks, and bonds.

On the institutional side, the note cited tokenized funds from BlackRock and Apollo with assets measured in the billions of dollars. It also said JPMorgan, Bank of America, Citigroup, and Wells Fargo are in talks about developing a shared stablecoin, a digital token designed to maintain a stable value, typically backed by cash or short-term Treasurys.

“There is a large delta between what people think is happening in crypto and what is actually happening,” Hougan wrote. He presented that gap as a reason to focus on broad exposure to the sector rather than trying to identify individual winners at an early stage.

According to Hougan, 2025 was a year when pilots began to shift to live applications, particularly in tokenized Treasurys and fund structures. He did not outline a timeline for broader adoption, stating that his goal was to highlight the scale of activity rather than forecast outcomes for specific companies.