Bitwise Chief Investment Officer Matt Hougan says Bitcoin’s (CRYPTO: BTC) resilience suggests that the market may be approaching an important turning point.

Tokenization Still Has Massive Room To Grow

Speaking in a CNBC interview on July 16, Hougan pointed out that recent developments in tokenization, including same-day settlement through DTCC, mark an important milestone for blockchain adoption even if the impact on crypto prices is still in its early stages.

Hougan noted only about $300 billion of assets are currently on chain compared with roughly $600 trillion in global financial assets, suggesting blockchain adoption has significant room for expansion.

“If all capital markets come on chain, it will eventually impact these assets,” he said.

He explained that while Bitcoin primarily serves as a form of digital gold, smart contract blockchains such as Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) could benefit directly from increased tokenization because network activity burns native tokens.

Bitcoin’s Digital Gold Thesis Remains Intact

Responding to criticism that Bitcoin has failed to act as an inflation hedge this year, Hougan argued investors should evaluate the asset over multi-year periods rather than short-term market cycles.

He noted Bitcoin has appreciated roughly 16,000% over the past decade, while the purchasing power of the U.S. dollar has declined 28% over the same period.

Hougan added that younger investors increasingly prefer digital assets over traditional stores of value, comparing Bitcoin’s evolution to the digitization of newspapers and music.

“The Bitcoin story remains intact,” he stated, adding that its adoption plays out over decades rather than months.

Institutions Are Becoming Bitcoin’s Marginal Buyer

Hougan outlined the profile of Bitcoin investors has changed significantly over successive market cycles.

He described a progression from Asian retail investors to U.S. retail participants, followed by Grayscale’s GBTC investors, then corporate treasury buyers such as Strategy, and now institutional investors.

According to Hougan, products such as spot Bitcoin ETFs, along with growing adoption by firms including BlackRock and Morgan Stanley, are accelerating that transition.

As institutional ownership increases, he expects Bitcoin’s price swings to become less extreme than in previous cycles.

Why Hougan Thinks Bitcoin Is Bottoming

Hougan highlighted Bitcoin’s recovery from roughly $59,000 to $64,000 despite concerns surrounding Strategy’s (NASDAQ:MSTR) Bitcoin sales, weakness in STRC (NASDAQ:STRC) and uncertainty over the CLARITY Act.

“I think we may be at a turning point. By the end of the year, we could be substantially higher,” Hougan predicts. He argued that the asset is nearing the end of its current four-year cycle.

He also argued Bitcoin’s drawdowns are becoming less severe as the asset matures. While previous bear markets saw declines of around 80% from peak levels, the current cycle has fallen roughly 50%, which he believes reflects a more mature market.

Hougan called Bitcoin “pretty attractive” at current levels, saying the asset appears to be in the process of forming a bottom.

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