Funds that follow a collection of cryptocurrencies are expected to soar in popularity next year as investors seek straightforward access to a wider variety of digital assets, according to Bitwise investment chief Matt Hougan.
“Crypto index funds are set to be significant in 2026,” Hougan stated in a note on Monday. “The market is becoming more intricate and the applications are expanding.”
He pointed out that while the overall crypto market is expected to grow, it isn’t feasible to predict which tokens will excel, making ownership of a fund that tracks the market a “great starting point,” though it may not suit everyone.
Numerous exchange-traded fund issuers, including Bitwise, provide funds that track multiple cryptocurrencies, drawing parallels to indexes like the S&P 500, which monitor the top 500 companies on US stock exchanges.
Multi-crypto ETFs are already available, with several launched in the US earlier this year that allocate crypto based on each token’s market capitalization. Nevertheless, these have experienced relatively modest inflows as they primarily hold Bitcoin (BTC), which currently accounts for nearly 60% of the market, according to CoinGecko.
“Buy the market” amid crypto uncertainty
Hougan noted that despite his experience and connections within the crypto space, he cannot confidently predict “which chain will succeed, or how events will unfold.”
“At this point in crypto’s evolution, I would argue it’s unpredictable,” he remarked. “Results will be influenced by regulation, execution, macroeconomic factors, actions of certain key individuals, luck, and countless other variables.”
“Accurately forecasting all of that would require supernatural insight.”
The crypto markets surged from November 2024 to January, following Donald Trump’s presidential election and inauguration, and have remained elevated due to his pro-crypto policies.
However, crypto has suffered due to sweeping US tariffs and uncertainties over further interest rate reductions as traditional finance becomes increasingly involved in the market.
“Given that uncertainty, my strategy is straightforward: I buy the market,” Hougan stated. “Specifically, I invest in a market-cap-weighted crypto index fund.”
He added that crypto “will be significantly more relevant in 10 years than it is today,” with the market potentially expanding up to 20 times in that period.
Hougan referenced Securities and Exchange Commission chair Paul Atkins’ remarks on Wednesday, suggesting that the US financial system could adopt tokenization within a “couple of years.”
The US equity market is a ~$68 trillion market. We currently have ~$670 million in tokenized stocks. https://t.co/IgyJ20oiar
— Matt Hougan (@Matt_Hougan) December 8, 2025
Related: Bank of America supports 1%–4% crypto allocation, paving the way for Bitcoin ETFs
“Stablecoins will become more significant. Tokenization will hold more importance. Bitcoin will have greater relevance. Additionally, I believe a dozen other major applications will emerge: prediction markets, decentralized finance (DeFi), privacy technologies, digital identity,” Hougan remarked.
“I prefer not to risk betting on the wrong chain,” he added. “Imagine correctly predicting a market that increases by 100,000x — and still underperforming because you backed the wrong option.”
“Thus, I utilize a crypto index fund as the foundation of my portfolio,” Hougan stated, “confident that, regardless of how crypto evolves, I’ll have exposure to the potential winners.”
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