Bitwise: The investment I'm most confident about in the cryptocurrency space
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Bitwise: The investment I'm most confident about in the cryptocurrency space
In the face of uncertainty, my approach is simple: invest in the entire market.
Navigating Web3 tides with focused insightsBy: Matt Hougan
Translation: AididiaoJP, Foresight News
There's one thing about cryptocurrency I believe deeply, and it directly shapes my investment strategy.
There's an interesting phenomenon in this industry: many people you meet appear extremely certain about everything.
"Ethereum is better than Solana and will definitely dominate."
"Solana is stronger than Ethereum and will ultimately win in the long run."
"Bitcoin is the only thing worth paying attention to."
Every time I hear such statements, I find them somewhat surprising.
I've been working full-time in the crypto space for eight years, regularly discussing ideas with around 140 colleagues, and frequently engaging with top-tier VCs, founders, researchers, and foundations. I'm quite familiar with these circles.
Even so, I still can't confidently tell you which blockchain will ultimately prevail or exactly how things will unfold.
In my view, at this stage of development, the future of cryptocurrency remains highly uncertain. The final outcome will be shaped by a combination of regulatory policies, execution capabilities, macroeconomic conditions, decisions made by a few key individuals, luck, and hundreds of other variables. Accurately predicting all of this would practically require superhuman abilities.
To me, those who speak with absolute certainty are mostly trying to convince themselves.
So how do I invest?
Facing such uncertainty, my approach is simple: invest in the entire market.
Specifically, I buy market-cap-weighted cryptocurrency index funds.
Why? Because the one thing I'm most confident about in crypto is this: a decade from now, cryptocurrency will matter far more than it does today.
I believe stablecoins will become more important, asset tokenization will become more important, and Bitcoin will become more important. In addition, over a dozen major use cases will emerge: prediction markets, decentralized finance (DeFi), privacy technologies, digital identity, new forms of equity, and more.
In my view, it wouldn't be difficult for the overall cryptocurrency market to grow 10 to 20 times in size over the next decade.
Don't believe it? A few days ago, SEC Chair Paul Atkins said in an interview with Fox Business that he expects all U.S. stock markets to move on-chain "within several years." That's $68 trillion in stock value. Currently, tokenized stocks total only about $670 million. That implies nearly a 100,000x growth potential.
I want to participate in this trend.
But here's the catch: I don't want to risk betting on the wrong chain. Just imagine—even if you correctly predict a market will grow 100,000x, picking the wrong chain could still leave you with minimal returns.
That's why I make cryptocurrency index funds the core of my portfolio, allocating only a small portion to specific directional bets. This way, no matter how the industry evolves, I can capture potential winners and still sleep soundly at night.
By 2026, cryptocurrency index funds will become increasingly important. The market is growing more complex, with richer applications emerging. While they may not suit everyone, for many people, they represent an excellent starting point.
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