“When I think about individual applications, like gold which is a $3 trillion market, there’s the idea of Bitcoin as millennial gold…”
Whether the SEC will one day rubberstamp the launch of cryptocurrency-linked ETFs remains an open question: But that isn’t stopping one ETF industry veteran from anticipating the rise of these types of products – as well as other financial products unique to crypto.
Per Bloomberg, Matt Hougan, the former CEO of Inside ETFs and ETF.com, is leaving the industry after 15 years to focus on crypto, saying he believes crypto has “the potential to transform financial markets,” just like ETFs did when they first emerged in the 1990s. Hougan is joining startup Bitwise Asset Management as vice president of research and development.
Hougan has also boldly embraced the “millennial gold” comparison that’s frequently touted by crypto enthusiasts.
“When I think about individual applications, like gold which is a $3 trillion market, there’s the idea of Bitcoin as millennial gold,” Hougan said in an interview. “It’s a multitrillion-dollar opportunity, and then when you get into utility tokens, each of those markets can be substantial.”
Of course, Hougan isn’t the first financial industry stalwart to pivot to crypto. Mike Novogratz, a former Wall Street trader, is trying to launch a merchant bank that he hopes to transform into the “Goldman of crypto”. He also recently ditched plans to launch a crypto-dedicated hedge fund. Even “world-renowned commodities guru” Dennis Gartman has gotten in on the blockchain action (to famously mixed results)…
The cryptocurrency market has grown 25x in the past year to about $500 billion. Bitcoin comprises a little more than a third of it, according to CoinMarketCap data.
But the question of how fast the market will develop is also an open one, and the trajectory of individual coins, as well as their volatility, are difficult to predict. So investors who want to become involved in the space should diversify.
For his part, Hougan said he’s working on defining an index methodology for the digital-assets market, saying that criteria such as market capitalization and weightings should be structured differently from other assets like stocks and bonds. Meanwhile, Bitwise, backed by investors including Khosla Ventures and General Catalyst, launched its first fund last year. Right now, the Bitwise HOLD 10 Private Index Fund holds the 10 largest crypto assets.