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“Everywhere I look, Wall Street is screaming that finance is moving on-chain. Not a little of it; all of it.” That is the assessment of Matt Hougan, chief investment officer at Bitwise Asset Management, who argues in a new market note that a widening disconnect has emerged between how aggressively major financial institutions are embracing blockchain and how little attention investors are paying to the shift.
Following years of volatility, regulatory scrutiny, and high-profile collapses, institutional players appear to be cautiously integrating blockchain technology into mainstream financial systems rather than treating crypto as a speculative niche.
According to industry data cited by Hougan, tokenised real-world assets, including U.S. Treasuries and commodities, are approaching $20 billion in on-chain value.
Hougan attributes investor hesitation largely to behavioural bias. Many market participants, he says, remain anchored to crypto’s early reputation as an experimental ecosystem associated with retail speculation and illicit use cases.
This psychological anchoring bias, studied in behavioural finance, causes investors to rely heavily on first impressions even when market conditions change.
Analysts say that bias may explain why capital inflows have lagged institutional developments despite increasing regulatory clarity and infrastructure investment.
Crypto-native investors may also be overlooking the transformation, Hougan added, because repeated promises of institutional adoption over the past decade created scepticism.
While investor sentiment remains cautious, large financial institutions are quietly expanding blockchain initiatives.
Major asset managers, including BlackRock and Apollo, have launched tokenised investment funds, as have large U.S. banks, including JPMorgan, Bank of America, Citigroup, and Wells Fargo.
Regulatory developments are also playing a role. U.S. By promoting experimentation with tokenisation and digital settlement layers, policymakers have shown a growing openness to blockchain-based financial systems.
Industry observers say tokenisation could reshape how securities trade and settle by enabling near-instant transactions, reducing intermediaries, and enabling programmable ownership structures.
If adopted at scale, these efficiencies could fundamentally alter capital markets worth hundreds of trillions of dollars globally.
Separate financial commentary has echoed similar trends, with traditional wealth managers increasingly recommending modest crypto exposure as digital assets become integrated into diversified portfolios.
The central question is whether the market is underestimating a structural shift or correctly pricing ongoing risks.
Hougan argues the gap between perception and reality could represent a rare investment opportunity.
If institutional adoption continues expanding while investor sentiment remains subdued, digital assets and blockchain infrastructure companies may be undervalued relative to their long-term role in finance.
Institutional experimentation does not guarantee immediate capital inflows into crypto tokens themselves, and macroeconomic conditions, regulation, and market cycles continue to influence prices.
The emerging narrative suggests crypto’s next phase may look less like speculative trading and more like infrastructure development.
As Wall Street increasingly tests blockchain-based systems behind the scenes, the industry may be entering a quieter but potentially more consequential stage.
