Bitwise CIO: How to Invest in the Crypto Industry

Author: Matt Hougan, Chief Investment Officer at Bitwise; Translated by Jinse Finance

One interesting thing about this industry is that you meet a lot of people who are absolutely convinced of everything:

“Ethereum is better than Solana; it will ultimately dominate.”

“Solana is stronger than Ethereum and will inevitably crush its rivals in the long run.”

“Only Bitcoin matters.”

I’ve always found this incredible.

I’ve been working full-time in the crypto industry for eight years. I have about 140 colleagues I exchange ideas with, and I frequently communicate with top venture capitalists, project founders, researchers, and foundations, giving me deep insight into these network ecosystems.

But even so, I still can’t confidently tell you which public chain will ultimately win or how things will precisely unfold.

At the current stage of crypto development, I believe the final outcome is impossible to predict. Regulatory policy, project execution, macroeconomic environment, the decisions of a few key individuals, luck, and hundreds of other variables will all influence the end result. Accurately forecasting all these factors would require supernatural foresight.

When people claim to be absolutely certain, I think they’re fooling themselves.

So, how should you invest?

Faced with this uncertainty, my strategy is simple: buy the entire market.

Specifically, I invest in a market-cap-weighted crypto index fund.

Why? Because the bet I’m most confident in within crypto is: crypto will be far more important in ten years than it is today.

My view is: stablecoins will become even more significant, tokenization will play a bigger role, and Bitcoin’s influence will continue to grow. Additionally, I think we’ll see a dozen or so major application scenarios emerge: prediction markets, decentralized finance (DeFi), privacy technologies, digital identity, new forms of equity, and more.

From my perspective, it’s entirely possible for the whole crypto market to grow 10 to 20 times over the next decade.

Don’t believe it? A few days ago, US SEC Chairman Paul Atkins said in an interview with Fox Business that he expects “within the next few years” all US stock markets will migrate on-chain. That involves $68 trillion in stock assets—right now, tokenized stocks are only around $670 million. That means a roughly 100,000x shift in scale.

I want to be invested in that transformation.

But the key is: I don’t want to risk betting on the wrong public chain. Imagine you correctly predicted a market that grows 100,000 times, but underperformed because you picked the wrong investment target—that would be regrettable, to say the least.

So, I make crypto index funds the core of my portfolio and only take individual bets on the margins. This way, no matter how the crypto industry evolves, I’ll have exposure to potential winners and can sleep more soundly at night.

By 2026, crypto index funds will be a hot trend. As the market becomes more complex and application scenarios multiply, while it may not be right for everyone, for many people (myself included), it’s an excellent place to start investing.