Hougan pointed to roughly $150 trillion in global equities and $350 trillion in bonds, arguing that platforms currently associated with crypto trading and lending could eventually serve markets orders of magnitude larger.
He compared the mistake to viewing Amazon solely as an online bookstore during its early years.
“It’s widely accepted now that tokenization is going to eat every kind of asset you can imagine,” Hougan wrote. Investors have yet to fully incorporate that shift into valuations of the platforms facilitating those transactions.
Can Wall Street Crush Crypto Natives?
Hougan’s second warning is against assuming TradFi giants will automatically dominate crypto-native businesses once they enter the market.
He cited stablecoins as one example.
Despite PayPal (NASDAQ:PYPL) launching its own stablecoin in 2023, Hougan said Tether (CRYPTO: USDT) and Circle (NYSE:CRCL) still control roughly 88% of the market, while PayPal holds around 1%.
The same dynamic has appeared elsewhere. Fidelity entered crypto custody years ago, yet Coinbase (NASDAQ:COIN) remains the largest U.S. crypto custodian.
Meanwhile, CME’s crypto derivatives activity remains smaller than offshore perpetual-futures markets.
Hougan argues crypto-native firms benefit from being focused entirely on the sector, moving faster and already having established users and trust.
There are exceptions. BlackRock (NYSE:BLK) has become the dominant player in spot Bitcoin ETFs.
TradFi firms tend to win with TradFi products, while crypto-native companies have remained surprisingly resilient in crypto-native markets.
Is AI The Trigger For 10x Blockchain Transactions?
The third mistake, according to Hougan, is extrapolating future blockchain activity from today’s transaction volumes.
Tokenized equities could eventually trade 24 hours a day, seven days a week, compared with the roughly 33 hours per week available during traditional U.S. stock-market hours.
AI agents could magnify that shift further by continuously monitoring portfolios, executing trades and making payments without requiring humans to initiate every transaction.
Hougan said a 10x increase in stock transactions in such an environment would not be difficult to imagine, while 50x or even 100x growth could become possible.
That matters because many blockchains and decentralized applications generate revenue from transaction activity. Even if individual transaction fees decline, Hougan argues dramatically higher volumes could more than compensate.
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