Growing Interest in Crypto Index Funds Predicted for 2026
Next year, funds that track various cryptocurrencies are expected to gain popularity, offering investors easier access to a broader array of digital assets, as noted by Matt Hogan, the head of investments at Bitwise.
“Crypto index funds will be a big deal in 2026,” Hogan stated in a recent note. “The market is becoming more complex, and the use cases are expanding.”
He pointed out that while the overall cryptocurrency market appears to be on an upward trend, it’s quite difficult to predict which tokens will excel. For some, a fund that tracks the market might not be the ideal choice, but it’s certainly “a great place to start.”
Many exchange-traded funds (ETFs) available today, including those from Bitwise, track multiple cryptocurrencies, drawing inspiration from indices like the S&P 500, which features the top 500 companies on U.S. stock exchanges.
While there are already multi-cryptocurrency ETFs, one launched in the U.S. earlier this year allocates cryptocurrencies based on each token’s market capitalization. However, CoinGecko reports that these funds primarily hold Bitcoin (BTC), which currently dominates nearly 60% of the market, leading to relatively slow inflow.
“In the world of cryptocurrency, the idea is to ‘buy the market’,” Hogan remarked.
Despite his experience and connections within the crypto industry, he admitted that it’s impossible to confidently determine which blockchain will succeed or accurately predict future outcomes. He emphasized, “At this stage in the evolution of cryptocurrencies, it’s simply not feasible to know.”
“Factors such as regulation, enforcement, and even luck will shape outcomes, along with a myriad of other variables,” he continued. “To predict all of this accurately requires, frankly, some sort of supernatural foresight.”
The virtual currency market witnessed a rise from November 2024 to January 2024 during Donald Trump’s presidential election and inauguration, continuing to ascend due to his policies favoring crypto.
However, with traditional finance increasingly involved in the space, cryptocurrencies are starting to feel the negative effects of widespread U.S. tariffs and ongoing uncertainty regarding interest rate changes.
“Given this uncertainty, my approach is straightforward: buy the market,” Hogan advised, specifically recommending a market cap-weighted crypto index fund. He expressed confidence that cryptocurrencies “will be much more important in 10 years than they are today,” predicting that the market could expand by up to 20 times during that period.
He also referenced comments from the Securities and Exchange Commission Chairman Paul Atkins, who suggested that the U.S. financial system might adopt tokenization within “a few years.”
Hogan pointed out that the U.S. stock market is approximately $68 trillion, but currently, only about $670 million is held in tokenized stock.
“Stablecoins, tokenization, and Bitcoin will become increasingly significant. Additionally, other major use cases like prediction markets, decentralized finance (DeFi), privacy technologies, and digital identity will follow,” Hogan added.
He cautioned against the risk of picking the wrong blockchain, saying, “Imagine calling a market’s success perfectly but still falling short because you backed the wrong chain.”
“That’s why I prioritize a crypto index fund as the foundation of my portfolio. I want to ensure that, regardless of how the crypto landscape evolves, I have exposure to potential winners,” Hogan concluded.
