The Boring Strategy That Beat 96% of Fund Managers: Matt Hougan on Crypto’s Real Edge In this episode of When Shift Happens, I sit down with Matt Hougan, CIO of Bitwise Asset Management, to discuss why his “boring” long-term crypto strategy has outperformed 96% of professional fund managers, the 80/20 rule that guides his approach, and why the trillion-dollar institutional wave is only just beginning. @Matt_Hougan doesn’t fit the mould of a Wall Street quant. He studied philosophy and environmental science, not finance. He sees himself as “a dad, an entrepreneur, and a writer,” someone who clarifies his thinking through words more than mathematical analysis. Yet today, he helps steer more than $10 billion in client assets at @BitwiseInvest, a firm pioneering crypto index funds and ETFs for mainstream investors. His path into finance — from leading ETF,com to becoming a voice for crypto’s long-term fundamentals — reflects a deeper philosophy: real investing is less about flashy trades and more about discipline, patience, and focus. From Philosophy to Finance Hougan’s unconventional background is central to his worldview. As he puts it, “Most of philosophy is very hard to read. Your job is to distill complex things into something simple. That’s an extraordinary skill.” That training has served him well in crypto. He’s also quick to dismiss the idea that one’s major or alma mater determines their career trajectory. “I’ve hired maybe a hundred people. I’ve never looked at someone’s major, or even where they went to college. What matters is your ability to think clearly and work hard.” For Hougan, confidence and persistence, more than credentials, are what shape careers. The Discipline of Consistency That persistence has defined Bitwise’s journey. Over seven years, the firm has grown from a niche experiment into a major asset manager. Hougan credits consistency above all: “Ninety percent of what separates successful entrepreneurs from people who aren’t is just not stopping. Crypto has ups and downs, but if you believe the thesis — that crypto will matter more in the future than today — you just keep going.” This long-term conviction, even through brutal bear markets like 2018, has been his compass. It’s also why he warns against the most common mistake in crypto: chasing noise. Most investors, he argues, lose money not because crypto fails, but because they let short-term swings shake them out. “There was a Fidelity study that found the best-performing accounts were the ones where the investors were dead,” he jokes. The point is serious: the less you tinker, the better your odds. Why Trading Alphas Is a Myth Hougan is blunt about one of finance’s most enduring illusions — the idea that you can consistently beat the market by picking winners. “Trading alpha is a fake story. It’s virtually impossible.” In both stocks and crypto, a handful of traders will strike gold, but most will quietly fail. “You hear from the 10% who win, not the 90% who lose their shirts.” Even as Bitwise’s CIO, he doesn’t claim an edge in trading individual tokens. Instead, he believes the real alpha comes from behavioural insight, that is, seeing that the world systematically underestimates crypto’s long-term potential. That conviction led him to his core framework: the 80/20 rule. Put 80% of your portfolio into long-term, high-quality bets like Bitcoin, Ethereum, and Solana, and reserve 20% for speculation. The speculative slice scratches the itch to chase trends, but the bulk stays grounded in assets likely to endure. The Case for Indexing in Crypto Hougan’s ETF background heavily informs his approach. In traditional finance, index investing was once controversial and critics claimed Americans wouldn’t settle for “average returns.” Yet over decades, index funds unfailingly outperform the vast majority of active managers. “The long-term investors in index strategies historically beat 70–80% of all investors. You can be in the top 25% just by doing nothing,” Hougan notes. In crypto, the same holds true, maybe even more that is expected. With thousands of tokens and FOMO, buying an index of top assets and holding is both simpler and smarter. He concedes that Bitcoin remains hard to beat, but argues that owning a basket protects investors from blowing themselves up chasing the latest shiny token. “Controlling your own behaviour is the whole key. An index helps you do that.” Bitcoin to $200K? Of course, no conversation with a crypto CIO is complete without a price target. While Hougan usually avoids short-term predictions, Bitwise’s research suggests Bitcoin could hit $200,000 by 2025. His reasoning is straightforward: demand now structurally exceeds supply. Since U.S. Bitcoin ETFs launched, they’ve absorbed more than half a million BTC, while annual supply is only 165,000. Institutions, he argues, are just getting started. “They have to buy a trillion and a half dollars’ worth of Bitcoin just to get to level.” For Hougan, Bitcoin won’t stop being “early” until it reaches gold’s $13 trillion market cap, which is still roughly a 10x from today. Why Most People Still Don’t Get It Despite these dynamics, Hougan believes 95% of the world still doesn’t take crypto seriously. Media narratives don’t help, with stories focus on meme coins, scams, and crashes, while ignoring the reality that 70% of the market is Bitcoin, Ethereum, and a handful of top assets. “If it were just Bitcoin and stablecoins, the story would be about governments adopting it as a sovereign asset. Instead, the circus colors perception.” That’s why Bitwise — and Hougan himself — have positioned their message around boring, disciplined investing. When I said “Crypto is a get-rich-slow scheme and a get-wrecked-quick scheme,” he agreed wholeheartedly. The key is resisting the second half of that equation. Lessons Beyond Crypto What makes Hougan’s perspective compelling is that it transcends markets. His life reflects the same principles he brings to investing: trust in long-term compounding, resist the noise, and always keep it simple. Even his weekly CIO memos are written while hiking or running, away from screens and Twitter feeds. “When you’re staring at prices, it’s impossible to think clearly. You have to step back.” For him, boring isn’t an insult. It’s a compliment. Investing should feel like “watching paint dry.” If it feels exciting, you’re probably doing it wrong. Final Takeaway Matt Hougan’s story is less about lucky calls and more about resisting fads by sticking to fundamentals. His advice for the next wave of crypto adopters is simple: don’t let noise or overconfidence wreck you. Anchor in long-term conviction, apply the 80/20 rule, and let compounding do its work. Or, as Hougan puts it: “Crypto is just getting started. You’ve already done the hard part by showing up. Don’t shoot yourself in the foot.” 👉If you enjoyed reading the summary, head over to When Shift Happens on YouTube or your favorite podcast platform to access the full convo.