Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiler: Shaw, Golden Finance

On Monday, I held eight sales communication meetings with my financial advisor. This is the most communication meetings in a single day in the eight years since I joined Bitwise. Most of the meetings were with advisory teams rather than individuals. I communicated with more than 40 financial advisors that day.

This communication allowed me to draw two key conclusions:

• The financial advisory group is still optimistic about the cryptocurrency track;

• Compared to Bitcoin, they are now more interested in stablecoins and asset tokenization.

The conclusion seems straightforward, but it clearly indicates the development direction of the industry in the next few months. In this week’s memo, I want to provide an in-depth analysis based on the details of the conversation.

Financial advisors still have strong interest in crypto assets

This is the core gain. Throughout the history of the development of the crypto industry, the start of every new bull market cycle is inseparable from the dual drive of product innovation breakthroughs and the entry of new investment groups.

• What ended the 2014 bear market? Ethereum went online, and the first batch of ordinary retail investors who were curious about crypto entered the market.

• What ended the 2018 bear market? The DeFi Summer craze is compounded by the entry layout of investors who received financial stimulus subsidies during the epidemic.

• What will end the heavy industry damage caused by the FTX thunderstorm in 2022? Bitcoin spot ETF has made substantial progress, with a large number of retail investors and hedge funds entering the market in batches.

I've been thinking aboutwhat forces could lead us out of the 2026 bear market. The popularity of new products is obviously a potential catalyst: Stablecoins, asset tokenization, perpetual contracts and various cryptographic practical applications are ushering in an explosive period. But if we want to achieve a strong reversal and completely get out of the downward cycle, we must welcome the large-scale participation of a new investment group. In my opinion, the biggest source of growth is financial advisors and institutional investors - currently there are still many barriers to entry for these groups to allocate crypto assets. Even if the market pulls back, they still keep paying attention, which in itself is a good sign.

Stablecoin + Tokenization>Bitcoin

The second finding is more noteworthy: Consultants are currently focusing on stablecoins and asset tokenization, not Bitcoin.

Bitcoin has always been the leader in cryptocurrency out of the previous bear market. After all, it is the largest and most ecologically mature crypto asset. Looking at the current currency price of about US$60,000, I personally believe that the long-term investor layout is extremely cost-effective. Bitcoin may still lead the market recovery this round.

But in this week’s communication, it was difficult for Bitcoin to arouse the willingness of consultants to discuss it in depth. In one communication after another, their curiosity about the practical applications of encryption was obviously stronger. Such applications are rapidly reshaping many fields such as capital markets and cross-border payments. I think there are two reasons behind this:On the one hand, the trading logic of betting on the devaluation of legal currencies has overall cooled down, for example, the price of gold has dropped 20% from its high point; on the other hand, stablecoins and asset tokenization have become the focus of attention. When you turn on the CNBC financial channel, you can always see big names such as SEC Chairman Paul Atkins, Goldman Sachs CEO David Solomon, BlackRock CEO Larry Fink frequently discussing stablecoins and tokenization. Investors don’t want to miss this opportunity.

If financial advisors will become incremental net buyers of crypto-assets in the next cycle, then there is a high probability that funds will flow first to investments related to stablecoins and tokenized businesses. Assets mentioned repeatedly in Monday’s exchange include Ethereum (ETH), Solana (SOL), Canton (CC), Chainlink (LINK), Avalanche (AVAX). Funds may also flow to new generation token projects with mature trading systems Hyperliquid (HYPE), or Figure (FIGR), Circle (CRCL), Coinbase (COIN) and otherencrypted listed company stocks.

To find out the true direction of the encryption market, communicating with industry insiders is always the most effective way. This week’s communication has made me even more convinced: the financial advisor group, with a total management scale of more than 175 trillion US dollars, has a much better understanding of the potential of the crypto industry than it did two years ago. This is significant.

This force may be the key driver to start the next round of bull market.