The crypto market may be approaching its bottom, according to Matt Hougan, Chief Investment Officer of Bitwise, a digital asset management firm overseeing more than $12 billion in assets. While retail investors continue to sell off in despair, institutional demand is quietly building — signaling a potential market turnaround.
Key Takeaways:
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Bitwise CIO Matt Hougan: “Retail investors are emotionally exhausted — and that’s often a sign of a market bottom.”
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Institutional optimism remains strong: Financial advisors still view crypto as a high-performing long-term asset class.
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Senator Cynthia Lummis: Calls for U.S. banks to integrate digital assets into the traditional financial system.
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Bitcoin dips and rebounds: BTC fell below $100,000 before recovering above $103,000.
Retail Capitulates, Institutions Prepare to Step In
Speaking on CNBC, Hougan said that retail sentiment has reached ‘maximum desperation’ after months of liquidations, failed yield protocols, and leverage blowouts.
“It’s hard to find a crypto-native investor who still feels excited — and that’s exactly what a bottom looks like,” he noted.
In contrast, institutional investors remain optimistic. Many financial advisors still want exposure to digital assets, which have proven to deliver strong long-term returns. Hougan predicts a strong year-end rally as institutional capital starts leading the next market cycle.
U.S. Pushes for Digital Asset Integration in Banking
On Capitol Hill, Senator Cynthia Lummis reaffirmed her commitment to incorporating digital assets into the U.S. financial system. She emphasized that community banks should be able to custody and manage both fiat and digital assets.
“This is the 21st-century economy. Digital assets are the future, and we need to make sure our community banks embrace that opportunity,” Lummis wrote on X.
States like Louisiana, Virginia, and Wyoming have already allowed banks to custody crypto, and more are expected to follow as new legislation progresses.
Bitcoin Rebounds After Sharp Sell-Off
After plunging below $100,000, its lowest level since June, Bitcoin has rebounded above $103,000 today. The recent dip was driven by:
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Strong selling pressure and $1.8 billion in ETF outflows;
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A stronger U.S. dollar following Fed Chair Jerome Powell’s hawkish remarks, suggesting higher interest rates for longer;
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The impact of President Trump’s 100% tariffs and export controls on China, triggering a broad crypto liquidation wave since October 10.
Since early October, Bitcoin has dropped around 20–25%, while altcoins such as Ethereum and Solana have plunged as much as 40%. Crypto-related stocks like MicroStrategy, Coinbase, and Robinhood have also declined.
However, as retail investors capitulate and the Crypto Fear & Greed Index falls into “extreme fear,” institutional accumulation appears to be underway.
According to Hougan, this could mark the beginning of a new bullish phase for the crypto market.
