BlackRock’s Tokenized iShares Plan: Matt Hougan Calls It the Bull Market Catalyst

Forget waiting on the Fed. The real market signal just flashed from the world's largest asset manager.

BlackRock's move to tokenize its flagship iShares ETFs isn't just another blockchain pilot—it's the institutional on-ramp the crypto market has been holding its breath for. Matt Hougan, Chief Investment Officer at Bitwise, labels it a foundational shift, the kind of heavyweight validation that historically marks a turning point.

The Mechanics of a Mega-Influx

Tokenization slices traditional funds into digital shares on a blockchain. It promises 24/7 trading, instant settlement, and radical transparency. For BlackRock, it's a logical evolution. For the crypto ecosystem, it's a tidal wave of legitimacy and potential capital. Suddenly, a multi-trillion-dollar conduit opens between traditional finance and digital asset rails.

Why This Narrative Has Teeth

Past cycles rallied on retail speculation and tech promises. The next leg needs institutional conviction and tangible utility. A tokenized iShares fund delivers both. It provides a familiar, regulated wrapper for traditional capital to flow into the crypto infrastructure, bypassing the clunky, costly intermediaries that have long skimmed profits from both sides. It's the ultimate 'if you can't beat them, join them' play—Wall Street finally building the bridge instead of guarding the moat.

The path from bear market to bull run is rarely a straight line. It's paved with concrete use cases that attract real money. BlackRock's blueprint might just be the pavement—even if the traditional finance old guard still thinks a token is something you get at an arcade.

Tokenized ETFs promise 24/7 settlement and DeFi integration

For iShares ETFs (representing holdings in stocks, bonds, and other traditional securities), tokenization would allow investors to trade, transfer, or use these assets as collateral in DeFi lending protocols without having to leave their digital wallets.

Bitwise Chief Investment Officer, Matt Hougan, considers this move a transformative one, saying that it is “one of the key narratives to lead the market out of a bear market” and emphasizing that the development is “very positive for LAYER one blockchains and the decentralized finance (DeFi) sector.” 

As such, tokenized iShares could serve as a potential new base layer of collateral backed by regulated cash flows and established issuers.

The CEO of BlackRock, Larry Fink, had previously described tokenization as “one of the most exciting areas of growth in financial markets” during an earnings call. 

Being the world’s largest asset manager, BlackRock views the nearly $4 trillion held in digital wallets across crypto assets, stablecoins, and tokenized assets as a major growth opportunity, especially with younger investors who are already comfortable with tokenized assets but lack access to high-quality traditional investment programs.

Other analysts suggest that BlackRock’s tokenized iShares may likely operate on established blockchain networks like Ethereum, or potentially on other private/permissioned blockchains, as the infrastructure choice will be critical for ensuring scalability and security.

Is Bitwise pivoting strategy because of Bitcoin?

This tokenization strategy comes as one of the avenues for navigating a bearish crypto market. Bitcoin is currently trading near $66,000, down by approximately 4.57% over the last 24 hours, with about $47 billion in trading volume. ethereum is trading at approximately $2,000 per token (down by nearly 5%), and Solana is trading around $78 (about a 6.5% reduction), leaving many firms with crypto exposure looking for ways to stay afloat in a very volatile period.

Hougan told investors that he expects bitcoin to settle between $75,000 and $100,000 in the first half of 2026, before spiking to record-breaking highs in the second half of the year as falling interest rates, institutional flows, and lower volatility replace the usual four-year cycle pattern.

However, for Bitwise, which trades across Bitcoin, Ethereum, Solana, and XRP ETFs (plus its Crypto Industry Innovators equity fund), the tokenization wave delivers both opportunity and competitive pressure. 

The firm has already started preparing itself for the shift by launching the Model Portfolio Solutions for Digital Assets (now available across various billion-dollar advisory firms) earlier this month. This will give financial advisors more structured frameworks to allocate crypto through ETFs.

The race to capture $4 trillion in digital wallet capital is on

The strategic importance of tokenized traditional assets goes beyond just adding blockchain settlement to existing assets. BlackRock’s strategy is targeting a critical gap: the $4 trillion sitting in digital wallets belonging to users who would like to remain in the crypto space but can’t access stocks, bonds, or diversified ETFs without converting their assets back into regular currency and using more traditional methods.

“If we could orchestrate a business plan around tokenization of ETFs, it is young people who are heavy users of tokenized assets, and then we could introduce them to more traditional assets sooner in their life path,” Fink explained during BlackRock’s earnings discussion.

For crypto platforms like Bitwise, the challenge is clear: BlackRock’s $10 trillion in assets under management plus the dominating iShares brand could quickly mop up market share in tokenized products, possibly repeating the pattern that happened with Bitcoin ETFs. 

BlackRock’s iShares Bitcoin Trust (IBIT) is now the fastest-growing ETF in history, accumulating over $70 billion in assets.

According to RWA.xyz, the distributed asset value of the tokenized real-world asset market is close to $25 billion in on-chain value, with private credit organizations and US Treasury-backed products emerging as early adopters.

Other major asset managers like Fidelity, Franklin Templeton, and Goldman Sachs are also expected to accelerate their tokenization strategies.

As blockchain technology continues to mature, Hougan’s theory that tokenization will help lead crypto out of this bear market may be proven right. Nonetheless, at the moment, the race is on to sit comfortably at the intersection of traditional finance credibility and crypto distribution, with billions in assets and the future of digital finance at stake.

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