Watch this before Solana hits $1 Trillion - Matt Hougan, Bitwise CIO
Matt Hougan outlines a two‑bet thesis on the exploding stable‑coin and tokenisation markets, explains why Solana’s ease‑of‑use and revenue lead give it outsized upside, and shows how institutional demand and a constrained supply create a rare crypto investment opportunity.
10m·Guest Matt Hougan·Host Host·
The Dual‑Bet Investment Framework
Hougan invests by pairing a macro bet on the growth of stable‑coins and tokenisation with a micro bet that Solana will capture an expanding slice of that market. The combination multiplies upside while limiting downside, a pattern he repeats across his portfolio.
Investing in Solana means making two simultaneous bets: market growth and Solana’s share.
- The core thesis is to back the overall expansion of the stable‑coin and tokenisation infrastructure market while also betting that Solana will win an increasing share of that pie.
- By tying the two bets together, a successful macro trend automatically lifts Solana, and a Solana win amplifies the macro trend’s payoff.
- This structure creates a leveraged upside: if both the market and Solana’s share double, the combined return is roughly four‑times the original capital.
- Hougan treats the two bets as inseparable; he would not hold Solana without believing the macro markets will expand dramatically.
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00:00:26“That's right. Before Solena, when I when I'm investing in Solena, I'm also making two bets at once. Number one, that the stable coin and tokenization infrastructure market will grow. Number two, that Solana will win an increasing share of that market.” — Matt Hougan
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00:01:00“The US Secretary of Treasury expects the stable coin market to 12x over the next four years.” — Matt Hougan
The stable‑coin and tokenisation markets are projected to explode by orders of magnitude.
- Treasury officials forecast a 12‑fold increase in the stable‑coin market within four years, signaling regulatory acknowledgement of massive growth.
- BlackRock’s CEO predicts that every tradable asset—from stocks to real estate—will eventually be tokenised, implying a universal shift toward digital representation.
- Hougan’s own research expects tokenisation to grow roughly 100× and stable‑coins 10‑20× over the next several years, aligning with the consensus among top‑level policymakers and asset managers.
- These macro forecasts justify the first leg of his dual‑bet strategy and set a high ceiling for any platform that can capture market share.
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00:01:05“The CEO of BlackRock, the world's largest asset manager, says every asset, every fund, ETF, stock, bond, real estate will be tokenized.” — Matt Hougan
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00:01:21“I think they're probably right. So I feel very good that the tokenization market will grow 100x over the next handful of years and the stable coin market will grow 10 to 20x over the next few years.” — Matt Hougan
Doubling both the macro market and Solana’s share yields roughly a 4× return.
- If the stable‑coin market doubles and Solana’s share of that market also doubles, the combined effect is a four‑fold increase in the value of a Solana‑centric position.
- Hougan illustrates this with a simple arithmetic example: a 2× market growth × 2× share gain = 4× total return.
- This multiplicative effect is the primary driver behind his conviction that a modest price move can translate into outsized portfolio performance.
- The math also underscores why he prefers assets with the potential to capture a larger slice of a rapidly expanding market rather than merely riding a static market.
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00:03:12“If it doubled versus ETH and the stable coin market doubled, it's up 4x. That's a pretty good return.” — Matt Hougan
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00:04:12“Solana total market cap is worth two times what it was worth in 2021, but the price of the asset is the same.” — Matt Hougan
Macro Growth of Stable‑Coin & Tokenisation Markets
Government forecasts and Wall Street leadership converge on a massive expansion of digital assets. Hougan treats these macro trends as the primary engine for crypto valuations, especially for platforms that can serve both stable‑coin issuance and tokenised securities.
U.S. Treasury projects a 12‑fold increase in the stable‑coin market in four years.
- The Treasury’s projection signals official confidence that stable‑coins will become a mainstream payment and settlement layer.
- A 12× growth trajectory translates into billions of dollars of new capital flowing into compliant, regulated stable‑coin ecosystems.
- Hougan uses this figure as a baseline for his macro bet, arguing that any blockchain that can host stable‑coins will capture a sizable slice of that influx.
- The projection also implies that regulatory clarity is improving, reducing the risk premium for institutional participants.
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00:01:00“The US Secretary of Treasury expects the stable coin market to 12x over the next four years.” — Matt Hougan
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00:01:21“I think they're probably right. So I feel very good that the tokenization market will grow 100x over the next handful of years and the stable coin market will grow 10 to 20x over the next few years.” — Matt Hougan
BlackRock’s CEO believes every tradable asset will eventually be tokenised.
- Larry Fink’s statement that stocks, bonds, real estate, and even ETFs will be represented as digital tokens reflects a belief that tokenisation is the next layer of liquidity.
- This vision aligns with the broader financial industry’s push toward on‑chain settlement, reducing friction and settlement risk.
- For a blockchain like Solana, which offers low‑cost, high‑throughput infrastructure, being the preferred tokenisation platform could capture a large share of the upcoming multi‑trillion‑dollar market.
- Hougan cites this endorsement as validation that tokenisation is not a niche trend but a structural shift in asset management.
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00:01:05“The CEO of BlackRock, the world's largest asset manager, says every asset, every fund, ETF, stock, bond, real estate will be tokenized.” — Matt Hougan
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00:01:38“Ethereum is the dominant asset. I love Ethereum. It has the lion share of the stable coin market. It is the leading play on tokenization. But Solana is a legit competitor with an interesting technological differentiation and importantly to me it's extraordinarily easy to use.” — Matt Hougan
Consensus among policymakers and asset managers points to 10‑20× stable‑coin growth and 100× tokenisation growth.
- Both the Treasury’s 12× projection and BlackRock’s tokenisation vision converge on a massive expansion, with Hougan’s own estimates slightly higher (10‑20× for stable‑coins, 100× for tokenisation).
- These numbers are not speculative; they are grounded in regulatory trends, institutional demand, and the accelerating digitisation of finance.
- The combined macro outlook creates a multi‑trillion‑dollar addressable market for blockchains that can host both stable‑coins and tokenised assets.
- Hougan argues that Solana’s low fees and speed position it to capture a non‑trivial share of this future market, reinforcing his dual‑bet thesis.
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00:01:21“I think they're probably right. So I feel very good that the tokenization market will grow 100x over the next handful of years and the stable coin market will grow 10 to 20x over the next few years.” — Matt Hougan
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00:01:00“The US Secretary of Treasury expects the stable coin market to 12x over the next four years.” — Matt Hougan
Solana vs. Ethereum: Competitive Landscape & Regulatory Opening
While Ethereum still dominates stable‑coin issuance, Solana’s newer, less‑regulated status and its ease‑of‑use give it a clear runway to capture market share. Hougan highlights how recent regulatory clarity unlocks institutional participation on Solana.
Ethereum dominates today, but Solana is a legitimate, technologically differentiated competitor.
- Ethereum holds the lion’s share of stable‑coin issuance and tokenisation projects, making it the de‑facto platform for many developers.
- Solana offers comparable security guarantees with lower transaction costs and higher throughput, which Hougan sees as a genuine competitive edge.
- The differentiation is not just technical; Solana’s architecture is designed for developer friendliness, making it easier to build and deploy applications.
- Hougan believes that this combination of cost efficiency and usability will allow Solana to erode Ethereum’s market share over time.
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00:01:38“Ethereum is the dominant asset. I love Ethereum. It has the lion share of the stable coin market. It is the leading play on tokenization. But Solana is a legit competitor with an interesting technological differentiation and importantly to me it's extraordinarily easy to use.” — Matt Hougan
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00:01:38“Look, Solana is a challenger in these markets.” — Matt Hougan
Regulatory uncertainty kept institutions on Ethereum; recent clarity opens Solana to institutional builders.
- Under the previous SEC regime, building stable‑coin or tokenisation infrastructure on Solana risked being classified as a security, pushing institutions toward Ethereum.
- The Gensler era introduced a regulatory cloud that made Solana appear risky; the recent release of clearer guidance (about a year ago) has lifted that cloud.
- This regulatory shift means institutions can now consider Solana without fearing enforcement actions, dramatically expanding its addressable user base.
- Hougan sees this as a catalyst that will accelerate Solana’s adoption among the same institutional players that previously were locked into Ethereum.
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00:02:41“It has been it was outside of the regulatory perimeter under the previous SEC. So if you were an institution building in the stable coin and tokenization market during the Gensler era your only choice was ETH. You couldn't build on Solana. It might be a security. It might be illegal. You wouldn't build there. That's only been released for a year now.” — Matt Hougan
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00:02:41“It's newer.” — Matt Hougan
Solana’s market‑cap has doubled since 2021 while its price has stayed flat, hinting at hidden upside.
- The total market‑cap of Solana is roughly twice what it was in 2021, yet the token price has not reflected that growth, indicating that the market is undervaluing the network.
- This discrepancy suggests that a price correction could be on the horizon if investors begin to price in the larger market‑cap.
- Hougan points out that the market‑cap increase is driven by expanding tokenisation and stable‑coin activity, which are not yet fully captured in the price.
- The lag between market‑cap and price provides an attractive entry point for investors who believe the fundamentals will eventually be reflected in the token’s valuation.
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00:04:12“Solana total market cap is worth two times what it was worth in 2021, but the price of the asset is the same.” — Matt Hougan
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00:02:20“It's one the size of ETH. How often do you talk about Solana versus Ethereum?” — Matt Hougan
Institutional Appeal & Revenue Advantage
Solana generates the highest blockchain revenue, a fact that resonates with institutions seeking tangible cash‑flow stories. Coupled with a small, constrained supply and a clear ETF vehicle, the network offers a rare, demand‑driven upside.
Solana generates more blockchain revenue than any other protocol.
- Revenue is a concrete metric that institutional investors trust; Solana’s on‑chain activity translates into higher transaction fees compared to peers.
- Hougan notes that this revenue lead makes Solana the most attractive blockchain for funds that need measurable cash‑flow.
- The revenue advantage also signals strong developer activity and user adoption, reinforcing the network’s long‑term viability.
- Institutions often allocate capital based on revenue‑generating assets, so Solana’s position gives it a built‑in advantage in capital allocation decisions.
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00:06:53“Solana has the most revenue of any blockchain.” — Matt Hougan
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00:06:53“Institutional investors love ETFs and they love revenue.” — Matt Hougan
A clear institutional narrative—stable‑coins, tokenisation, and high revenue—makes Solana an easy sell to investors.
- When pitching to institutions, Hougan frames Solana as a small, high‑revenue blockchain that sits squarely in the stable‑coin and tokenisation space, which are familiar to traditional finance.
- The narrative sidesteps the “crypto‑native” jargon and translates Solana’s technical strengths into familiar financial concepts like revenue streams and market size.
- This story resonates with fund managers who need a simple, quantifiable thesis to justify exposure.
- The combination of revenue leadership and alignment with regulated asset classes reduces perceived risk and accelerates capital inflows.
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00:07:16“Talk to institutional investors about stable coins and tokenization. You have this relatively small blockchain that generates the most revenue in the crypto market...” — Matt Hougan
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00:07:56“Small constrained size, significant institutional demand, stable coins and tokenization... best setup for an asset.” — Matt Hougan
The Solana ETF and limited supply create a demand‑driven price catalyst.
- The Solana ETF has attracted substantial assets despite a broader market downturn, indicating strong investor appetite for regulated exposure.
- Because Solana’s total supply is relatively small, institutional inflows into the ETF translate into a higher proportion of the circulating token, amplifying price pressure.
- Hougan describes the setup as “small constrained size, significant institutional demand,” a classic supply‑demand imbalance that can drive outsized returns.
- The ETF also provides a familiar vehicle for traditional investors, lowering the barrier to entry and further tightening the supply‑side dynamics.
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00:08:31“Our Solana ETF has pulled in a lot of assets despite the market being down. It's the most successful ETF launch this year.” — Matt Hougan
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00:10:14“I have more Solana than you would in a market cap weighted portfolio.” — Matt Hougan
Ease‑of‑Use as the Undervalued Killer App
Hougan argues that Solana’s simplicity for developers and end‑users is a far more powerful moat than raw transaction‑per‑second metrics. This user‑experience advantage is largely ignored by the market, creating a hidden source of upside.
Investors over‑focus on TPS and ignore Solana’s true killer app: ease of use.
- Hougan repeatedly dismisses transaction‑per‑second (TPS) as a marketing gimmick, emphasizing that end‑users care about simplicity, not raw numbers.
- He describes ease of use as an “underrated killer app” that lowers onboarding friction for both developers and traders.
- The narrative suggests that platforms that are easy to adopt will capture more organic growth than those that chase headline metrics.
- By shifting focus from TPS to usability, investors can identify undervalued opportunities that the hype‑driven market misses.
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00:05:18“Ease of use is a killer app that's underrated by investors.” — Matt Hougan
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00:05:31“TPS ... I actually hate on this podcast every time I hear what is this explain to your mom transaction per second who cares about this.” — Matt Hougan
Centralization and simplicity give Solana a practical advantage over complex L2 solutions.
- Hougan notes that while decentralization is philosophically important, end‑users prioritize a seamless experience, which Solana’s more centralized design delivers.
- The platform’s “dead‑easy” onboarding reduces the learning curve, making it attractive for retail traders and institutional on‑ramps alike.
- He argues that the market undervalues this simplicity, treating it as a drawback rather than a competitive strength.
- By recognizing centralization as a feature for usability, investors can better assess Solana’s real‑world adoption potential.
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00:05:41“Centralization ... is an important philosophical difference ... for an end user ... ease of use is the killer app.” — Matt Hougan
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00:06:07“The market overlooks that ... one of its killer features ... will cause it to win an increasing share of the market.” — Matt Hougan
Behavioral bias—memecoin stigma—causes the market to dismiss Solana’s fundamentals.
- Hougan observes that Solana is often labeled a “memecoin” due to past community activity, which creates a psychological barrier for serious investors.
- He argues that jokes and meme activity do not preclude a platform from maturing into a serious financial infrastructure.
- This bias leads to under‑pricing, as investors ignore the underlying revenue, regulatory clarity, and usability advantages.
- Recognizing and correcting for this behavioral dismissal can unlock a hidden upside as the market re‑prices the network on fundamentals rather than meme perception.
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00:06:16“And I also think it's been sort of labeled with this memecoin only overhang.” — Matt Hougan
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00:02:41“It has been it was outside of the regulatory perimeter under the previous SEC. So if you were an institution building in the stable coin and tokenization market during the Gensler era your only choice was ETH. You couldn't build on Solana. It might be a security. It might be illegal. You wouldn't build there. That's only been released for a year now.” — Matt Hougan
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