Advisors Favor Stablecoins, Tokenization Over Bitcoin

Bitwise Chief Investment Officer Matt Hougan wrote in a memo Wednesday that meetings with more than 40 financial advisors this week showed greater interest in stablecoins and tokenization than in bitcoin.

Hougan held eight calls in one day and spoke with multiple advisory teams. Advisors continued to express interest in crypto despite the current bear market, but conversations shifted from pure bitcoin exposure to crypto tools that connect to traditional finance.

He identified two reasons for the shift. First, the “fiat debasement trade” has waned among many investors. Second, stablecoins and tokenization are appearing more often in public discussion by regulators and executives at large financial firms. “Their eyes are on stablecoins and tokenization more than bitcoin,” Hougan wrote.

Hougan described stablecoins as digital tokens usually pegged to fiat currencies and used for trading, payments and settlement. He defined tokenization as representing ownership of real-world assets-such as securities, real estate or commodities-as digital tokens on a blockchain, which can speed settlement and expand liquidity in capital markets.

He traced past crypto market rallies to new products and new investor groups, citing Ethereum’s launch and early retail after 2014, decentralized finance activity and retail participation after 2018, and spot bitcoin exchange-traded funds alongside returning retail and hedge funds after the 2022 FTX collapse.

Hougan wrote that financial advisors and institutional buyers are likely sources for a new wave of investor inflows, and he noted many still face hurdles to accessing crypto exposure. He pointed out that financial advisors collectively manage more than $175 trillion.

If advisors move capital into crypto, initial inflows may favor assets tied to stablecoins and tokenization rather than bitcoin, Hougan wrote. He listed assets and firms discussed during meetings, including Ethereum, Solana, Canton, Chainlink and Avalanche, trading-focused tokens such as Hyperliquid, and companies including Figure, Circle and Coinbase.

Hougan added that he finds bitcoin above $60,000 “incredibly attractive” for long-term investors and acknowledged bitcoin’s historical role as the largest and most established digital asset that has led recoveries across the crypto market.