Institutions Bet Big on Crypto While Retail Investors Remain Skeptical, Says Bitwise CIO

Bitwise CIO Matt Hougan sees a striking divide in the crypto market, where institutional investors are increasingly bullish while retail traders remain pessimistic.

He noted that major financial players are pouring record amounts of capital into crypto through ETFs, marking a shift from previous uncertainty. Meanwhile, Washington’s stance has evolved from a regulatory threat to a more supportive environment under the Trump administration, further fueling confidence among institutions.

Retail investors, however, appear disconnected from this enthusiasm. Bitwise’s proprietary on-chain sentiment index has hit one of its lowest levels ever, mirroring the bleak outlook among smaller investors, particularly those heavily invested in struggling altcoins.

Hougan attributes this divergence to the fact that altcoins have not yet found a major new catalyst like DeFi or ICOs did in past cycles, aside from the recent speculative surge in meme coins.

Despite this, he remains convinced that institutional investors have the right perspective. Bitcoin demand from corporations and ETFs has already surpassed the amount mined this year, reinforcing a strong long-term outlook. While altcoins face a more complex landscape, Hougan believes regulatory clarity, national efforts to integrate stablecoins, and growing institutional confidence will drive the next wave of innovation.

According to him, the fundamentals of the crypto market remain strong despite poor retail sentiment. He predicts that within a couple of years, the transformation of altcoins will become undeniable, bringing decentralized finance applications to a broader audience.