Wall Street is going on a streak, and investors haven’t gotten it yet, says Bitwise CIO.

Wall Street firms are launching token currencies, stablecoins, and on-chain products, yet Bitwise’s CIO says investors remain stuck in an outdated narrative of crypto.

Bitwise Chief Investment Officer Matt Hougan believes there is a significant disconnect between perception and reality in the crypto market. He pointed out that investors often misinterpret what is really going on because behavioral biases, especially entrenched biases, distort their perception.

A focus bias, the tendency to focus on the first piece of information encountered, shapes how people evaluate opportunities. This leads them to a very large initial impression even when new evidence emerges. Hougan said this feature played a major role in his entry into crypto in 2018.

Tokenization Is Exploding

In his latest memo, Hougan emphasized that Wall Street is moving over the chain and pointed to some visible developments. Paul Atkins launched “Project Crypto,” a commission-wide initiative aimed at modernizing securities regulation so US markets can operate on-chain. Larry Fink said the industry is entering the early stages of tokenizing everything. BlackRock followed that vision by launching its $2 billion BUIDL Treasury token fund on Uniswap. Apollo has branded its $700 billion Diversified Credit Fund across six blockchains and announced plans to acquire a stake in Morpho.

Additionally, major banks, such as JPMorgan, Bank of America, Citigroup, and Wells Fargo, are discussing a joint stablecoin. JPMorgan has already launched a deposit token on Base. Fidelity is hiring a DeFi vaults manager.

Despite these initiatives, the Bitwise manager said that traditional investors are failing to register these changes. Even the crypto investors themselves, he added, are showing weariness at the repeated claims of institutional discovery. The data, however, tells a different story.

Where Does the Value Go?

Real-world assets with tokens have grown significantly from 2020 to 2025. Hougan cautioned that while the opportunity is clear, the exact way to seize it is uncertain. Questions remain about whether the value from tokens will grow from Layer 1 public networks like Ethereum and Solana, to private blockchains like Canton Network and Tempo, to DeFi tokens, or to companies that build in the ecosystem, including operators like BlackRock and JPMorgan, versus crypto-native firms.

“Great alpha opportunities come when the narrative of consensus is old and reality has moved on, but investors are still clinging to the old story. That’s exactly where we are with crypto today.”

Meanwhile, crypto analytics platform Presto Research expects tokens to be the central driver of the next phase of the crypto industry. In its 2026 vision, the company stated that the combined value of real world assets of tokens and stablecoins will reach $490 billion by the end of 2026.

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The report also noted that growth will be fueled by demand for US Treasury bonds and debt instruments.