Crypto Index Funds To Popularize With Market Complexity

Funds that track a basket of cryptocurrencies are likely to rocket in popularity next year as investors look to get easy exposure to a broader range of digital assets, according to Bitwise’s investment chief Matt Hougan.

“Crypto index funds are going to be a big deal in 2026,” Hougan said in a note on Monday. “The market is getting more complex and the use cases are multiplying.”

He added that while the overall crypto market is poised to grow, it isn’t possible to predict which tokens will perform, so owning a fund that tracks the market is a “great place to start,” although it’s “not right for everyone.”

Many exchange-traded fund issuers, including Bitwise, offer funds that track multiple cryptocurrencies, drawing inspiration from indexes such as the S&P 500, which track the top 500 companies on US stock exchanges. 

Multi-crypto ETFs already exist, with some going live in the US earlier this year that hold crypto in proportion to each token’s market capitalization. However, these have seen relatively modest inflows as they largely hold Bitcoin (BTC), which currently dominates nearly 60% of the market, per CoinGecko.

“Buy the market” as crypto is unknowable

Hougan said that despite his experience and network of experts within crypto, he can’t say “with confidence which chain will win, or precisely how things will turn out.”

“At this stage of crypto’s development, I’d argue it’s unknowable,” he added. “Outcomes will be shaped by regulation, execution, macro conditions, the actions of a few key individuals, luck, and a hundred other variables.”

“Forecasting all of that correctly would require supernatural foresight.”

Crypto markets rallied from November 2024 to January through Donald Trump’s presidential election and inauguration and have remained elevated on his pro-crypto policies.

However, crypto has felt the negative effects of sweeping US tariffs and uncertainty over further interest rates cuts as traditional finance becomes more involved in the market.

“Given that uncertainty, my approach is simple: I buy the market,” Hougan said. “Specifically, I buy a market-cap-weighted crypto index fund.”

He added that crypto “will be far more important in 10 years than it is today,” and the market could grow up to 20 times over that time.

Hougan pointed to Securities and Exchange Commission chair Paul Atkins’ comment on Wednesday that the US financial system could embrace tokenization in 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 backs 1%–4% crypto allocation, opens door to Bitcoin ETFs

“Stablecoins will matter more. Tokenization will matter more. Bitcoin will matter more. And I think a dozen other major use cases will follow: prediction markets, decentralized finance (DeFi), privacy tech, digital identity,” Hougan said.

“I don’t want to risk picking the wrong chain,” he added. “Imagine correctly calling a market that goes up 100,000x—and still underperforming because you backed the wrong horse.”

“So I use a crypto index fund as the core of my portfolio,” Hougan said, “knowing that, however crypto evolves, I’ll own exposure to the potential winners.”

Magazine: Solana vs Ethereum ETFs, Facebook’s influence on Bitwise — Hunter Horsley