How Billion-Dollar Funds Actually Invest In Crypto | Bitwise CEO Hunter Horsley

Bitwise’s survey of 15 large institutional investors across endowments, corporations, sovereigns and pensions found that none had cut crypto exposure during the bear market, and many had added to it. Scott said every respondent owned Bitcoin; Hunter Horsley said investors wanted to retain their positions and some might increase them. The group generally viewed crypto as likely to be entering a new bull cycle, though Bitwise did not identify the investors. Horsley cautioned that institutional adoption is hard to measure publicly because investors rarely announce their holdings.

Horsley estimated that U.S. investors are roughly two-thirds of the way toward having access to Bitcoin through available channels, but emphasized that access does not guarantee investment. Bitwise products are approved on wealth platforms representing more than $6 trillion in assets, while Bitcoin ETFs also offer access to U.S. IRAs holding more than $15 trillion and hedge funds with $4 trillion. Bitcoin products attracted $1.8 billion in the first half of the year, despite the bear market; Horsley estimated Q3 inflows at about $1 billion, with final figures still pending. Rising prices can boost interest, he said, while declines may prompt investors to wait and sharp surges can make an asset seem overheated or leave buyers feeling they have missed their chance.

ETFs are also changing how some investors hold crypto. Horsley said investors exchanged about $60–70 million in spot assets for ETF shares during Q3. The minimum transaction size for this shift fell from $50 million last year to $3 million, and he expects it to reach $1 million soon. He linked the move to investors seeking simplicity and peace of mind, including after incidents. Some wealth advisors who had arranged direct custody of spot Bitcoin or Solana are moving clients into ETFs for easier management.

For wealth management, Horsley sees more potential in connecting clients to on-chain finance than in adding ever more tokens to portfolios. U.S. wealth managers oversee about $40 trillion, but their infrastructure is not integrated with on-chain activity. ETFs let advisors add Bitcoin and other crypto assets to portfolios; proposed SEC custody guidance could be more consequential for clients seeking stablecoins, vaults or tokenized assets. Horsley expects on-chain finance opportunities to begin appearing in wealth management next year and said SEC guidance could enable more activity in 2027. He sees little client demand for exposure to an asset with a $400 million market capitalization.

Bitwise’s automated token portfolios set holdings and weights, rebalance automatically and deliver individual tokens to investors’ wallets rather than using pooled vehicles. Its Mag 7X portfolio contains eight tokens: the Mag 7 plus Base X. Horsley said such portfolios could provide flexible exposure without adding portfolio-management work, but attracting billions or tens of billions of dollars would depend on compelling strategies and easy distribution; he did not suggest that scale was assured. He also said wider adoption of on-chain investment products may require bringing them into familiar apps and interfaces. In his view, user experience and simplicity will be central adoption challenges in 2026, and tokenized stocks would need to feel like ordinary stocks.

Horsley expects public blockchains to face greater scrutiny in 2026 over revenue and whether usage creates value that flows to tokens. Crypto indexes have attracted less interest than expected because early adopters prefer specific-asset bets, but he expects indexes to gain traction as busier mainstream investors arrive. Bitwise’s rules-based BITW index rebalances monthly and currently includes Hyperliquid, Uniswap and Zcash. Its NEAR ETF gathered $50 million in its first three days, which Horsley said suggested demand for new products remained stronger than he and Matt Hogan had thought two months earlier. He sees credible AI–blockchain intersections, considers NEAR well positioned, and said AI’s growing use of personal information makes privacy and Zcash more relevant.

Horsley said major regulated financial institutions are entering crypto without waiting for regulatory clarity, though clarity could help some use cases; existing laws and regulator rules already apply, including the Genius Act. He expects institutional participation and U.S. adoption to broaden over the next two years and become less partisan. The speakers questioned whether the CLARITY Act could have unintended consequences, and suggested that widespread blockchain settlement could make crypto infrastructure difficult for a future administration to roll back.