Bitwise CIO: How to Invest in the Crypto Industry

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

The interesting thing about this industry is that many people you meet are absolutely convinced about everything:

“Ethereum is better than Solana, and it will eventually dominate.”

“Solana is stronger than Ethereum, and in the long run, it will definitely crush its competitors.”

“Only Bitcoin truly matters.”

I always find this quite incredible.

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

But even so, I still cannot 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 unpredictable. Regulatory policies, project execution, the macroeconomic environment, decisions by a few key individuals, luck, and hundreds of other variables will all influence the final direction. Accurately predicting all these factors would require supernatural foresight.

Those who claim to be absolutely certain, in my view, are simply deceiving themselves.

So, how should you invest?

In the face of such uncertainty, my strategy is simple: buy the entire market.

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

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

My view is: the importance of stablecoins will further increase, tokenization will play a bigger role, and Bitcoin’s influence will continue to grow. In addition, I believe there will be a dozen or so major application scenarios: prediction markets, decentralized finance (DeFi), privacy technologies, digital identity, new forms of equity, and so on.

In my opinion, over the next decade, it is entirely possible for the entire crypto market to grow 10 to 20 times.

Don’t believe it? A few days ago, Paul Atkins, Chairman of the US SEC, said in an interview with Fox Business Channel that he expects “within the next few years,” all US stock markets will migrate on-chain. This involves $68 trillion in stock assets—while currently, the scale of tokenized stocks is only about $670 million. This means a transformation of about 100,000 times in scale.

I want to be part of this investment revolution.

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

Therefore, I make crypto index funds the core of my portfolio, only making individual bets on the margins. This way, no matter how the crypto industry evolves, I will have exposure to potential winners and be able to sleep better at night.

By 2026, crypto index funds will become a hot trend. As the market becomes increasingly complex and application scenarios multiply, while it may not be suitable for everyone, for many people (myself included), it is an excellent starting point for investing.