Bitcoin Takes Backseat as TradFi Advisors Gravitate Toward Stablecoins and Tokenization: Bitwise Report
According to Bitwise's Matt Hougan, financial advisors showed minimal interest in Bitcoin conversations recently, instead focusing their attention on stablecoins and asset tokenization.
Financial advisors representing major institutional players are displaying heightened enthusiasm for stablecoins and asset tokenization compared to Bitcoin, a shift that could potentially help the cryptocurrency market recover from its current downturn, according to Matt Hougan, chief investment officer at Bitwise.
In a Wednesday note, Hougan revealed that during recent conversations with over 40 financial advisors, participants remained "still interested in crypto" while demonstrating that they are "more interested today in stablecoins and tokenization than they are in Bitcoin."
"It was pretty hard to engage with advisors on Bitcoin this week," he said. "In call after call, they expressed much more curiosity over the real-world applications of crypto that are quickly reshaping everything from capital markets to global payments."
Wall Street's attention has increasingly turned toward stablecoins and tokenization in recent months, coinciding with Bitcoin (BTC) losing its upward trajectory, with the digital asset declining nearly 30% year-to-date to reach $62,500.
Circle, a major stablecoin issuing company, experienced a highly anticipated initial public offering in June 2025, witnessing its shares surge dramatically to a high of $240 following its $31 debut price. The stock has subsequently declined alongside broader weakness in cryptocurrency-related equities, settling at slightly below $79 on Wednesday.
The tokenization sector appears poised for significant growth as reports suggest the US Securities and Exchange Commission intends to permit trading of tokenized stocks, a development that could bolster traditional investor confidence and stimulate capital inflows.
"It's hard to turn on CNBC and not hear someone like SEC Chair Paul Atkins or Goldman Sachs CEO David Solomon or BlackRock CEO Larry Fink talking about stablecoins and tokenization," Hougan said. "Investors want to be a part of that."
According to Hougan, growing enthusiasm for these blockchain technologies could serve as the catalyst that propels crypto into its next bull cycle, which has traditionally been sparked by "new product breakthroughs and new types of investors."
The optimal scenario, as Hougan describes it, involves financial advisors and institutional market participants forming the next wave of crypto investors, with their capital predominantly flowing toward stablecoin and tokenization-related opportunities.
Hougan noted that his discussions with advisors included mentions of Ethereum, Solana, Canton, Chainlink and Avalanche, alongside trading platform Hyperliquid and cryptocurrency firms Figure, Circle and Coinbase.
Digital asset exchanges like Coinbase have been diversifying their operations beyond traditional cryptocurrency trading activities, attempting to leverage rising investor demand for blockchain-enabled financial services.
A growing number of cryptocurrency exchanges have started providing tokenized stock offerings, though primarily in markets outside the US, which have seen increasing adoption as market participants look to access exposure to high-profile equities and heavily anticipated initial public offerings, including SpaceX's scheduled Friday debut.