This episode reveals the profound underestimation of crypto's scale, arguing that Wall Street's institutional embrace and regulatory shifts are poised to move the entire financial economy onchain, dwarfing current market perceptions.
The SEC's Trillion-Dollar Vision & Crypto's Underestimated Scale
- Regulatory Foresight: The SEC Chairman's statement signals an inevitable shift towards tokenized securities.
- Market Disparity: The current tokenized stock market represents a minuscule fraction of the total US stock market, indicating massive growth potential.
- Lost Ambition: Crypto Twitter and native investors often fail to grasp the magnitude of this impending institutional shift.
- Foundational Progress: Regulatory advancements in 2025 laid the groundwork for this exponential growth, despite “mediocre” price action.
“The chairman of the SEC, the most important financial regulator in the US and the world, said all US stocks would be on chain in a couple of years... That's a 100,000x bigger. What are we even talking about?” – Matt Hogan
The Demise of the Four-Year Cycle & Bitcoin's Maturation
- Weakened Halving Impact: Each halving removes less proportional supply, reducing its price-driving force.
- Favorable Macro Trends: Interest rates are expected to decline, and quantitative tightening has ended in the US, increasing global liquidity.
- Reduced Blowup Risk: Regulatory clarity and qualified custodians mitigate the impact of past industry failures like FTX or Mt. Gox.
- Institutional Overwhelm: Persistent demand from institutional investors will override historical cyclical patterns, leading to sustained price appreciation.
“All the reasons you would believe the four-year cycle exists are either extraordinarily weak or actually negative.” – Matt Hogan
Bitcoin's Volatility Shift & Institutional Portfolio Integration
- Institutional Adoption: Increased participation from financial advisors, family offices, and endowments deepens market liquidity, reducing volatility.
- Equity Volatility: Major tech stocks exhibit increasing volatility, making Bitcoin comparatively more stable.
- Portfolio Diversification: Bitcoin's lower correlation and attractive return profile make it a compelling addition to traditional portfolios.
- “Rat Poison Square” Debunked: The perception of Bitcoin as excessively risky is eroding as its volatility profile improves.
“Bitcoin's on this journey to being less volatile than it was, you know, 1, 2, 5, 10 years ago. And that is a marked trend as it moves from a retail asset to an institutional driven asset.” – Ryan Rasmusen
ETF Dominance & The Rise of "Suitcoiners"
- ETF Growth Trajectory: Historically, ETF flows ramp up significantly after their first year, with Bitcoin and Ethereum ETFs following this pattern.
- Platform Onboarding: Major advisory platforms like Morgan Stanley and Merrill Lynch, controlling trillions in assets, have recently enabled access to crypto ETFs.
- Supply-Demand Imbalance: ETF demand is projected to far exceed the new issuance of Bitcoin, Ethereum, and Solana, creating significant upward price pressure.
- Retail Normalization: ETFs provide an accessible, low-fee venue for retail investors to dollar-cost average into crypto, mirroring traditional stock and bond investments.
“What this means is that there is this gentle tide consistently lifting prices up... those Suitcoiners are coming in force in 2026.” – Matt Hogan
Crypto Equities Outperformance & Tokenization's Regulatory Catalyst
- Underestimated Value: Wall Street often misjudges crypto companies, failing to recognize their diverse business lines and rapid growth.
- Access Proxy: Crypto equities offer a compliant entry point for institutional investors restricted from direct token allocation.
- Regulatory Release: The easing of aggressive regulatory stances on tokens with economic rights will spur innovation and better economic capture mechanisms (e.g., fee switches, increased burns).
- Converging Assets: The market will increasingly view equities and tokens as a spectrum, requiring diversified allocation to capture the full crypto market beta.
“To own the market in crypto, you need crypto assets and you need crypto equities... You're going to need these tokens as well because we don't know where all the value will accrue.” – Matt Hogan
Onchain Vaults (ETFs 2.0) & Ivy League Validation
- Vault Mechanics: Onchain vaults allow users to deposit assets (e.g., stablecoins) for third-party "curators" to manage, generating yield or total returns through DeFi protocols.
- Disruptive Potential: Vaults are positioned to disrupt traditional mutual funds and ETFs, potentially growing to trillions in AUM.
- Ivy League Influence: Endowments like Harvard and Brown, already invested, set the tone for broader institutional adoption, much like Yale's impact on hedge funds.
- Professionalization: The return of high-quality professional crypto managers as curators will drive renewed confidence and growth in the vault sector.
“I think the next version of that is vaults. Someday we'll be sitting here talking about multiple trillions of dollars in vaults... I think it's that big of a deal.” – Matt Hogan
ETP Explosion & Decoupling from Equities
- Regulatory Clarity: The SEC's generic listing standards provide a clear roadmap for ETP issuers, accelerating product launches beyond single-asset spot ETFs.
- Diverse Offerings: The market will see a proliferation of index funds, smart beta, and momentum strategies for crypto, mirroring traditional finance.
- Correlation Shift: Bitcoin's correlation with equities, currently around 0.4, will decrease as crypto-specific drivers (regulation, adoption) outweigh macro conditions.
- Magical Mix: Lower volatility, higher returns, and reduced correlation make crypto an increasingly attractive investment for institutions.
“We think over 100 crypto linked ETPs will launch next year. I think those will be spot, crypto, index, equities, smart beta, momentum, all kinds of things.” – Ryan Rasmusen
Investor & Researcher Alpha
- Capital Reallocation: Institutional capital is shifting from traditional tech to crypto equities and ETFs, seeking higher beta exposure and compliant access. Researchers should track the flow of funds into newly approved ETPs and the growth of onchain vaults.
- Regulatory Bottleneck: The Clarity Act remains a critical bottleneck for the full explosion of tokenization and DeFi. Research into its legislative path and potential impact on specific protocols is paramount.
- Obsolete Market Narratives: The "four-year cycle" and "Bitcoin as purely risk-on" narratives are becoming obsolete. Investors should focus on long-term institutional adoption and crypto-specific drivers.
Strategic Conclusion
Crypto is entering an era of unprecedented institutional integration and regulatory clarity, poised for exponential growth across tokenization, ETFs, and onchain finance. The next step for the industry is to fully leverage this institutional embrace, building out the infrastructure for a truly bankless, tokenized global economy.
