ICO-inspired capital formation could be crypto's next gold mine: Bitwise

Bitwise CIO Matt Hougan suggested that the next major disruptive force in crypto may emerge from capital formation, driven by a renewed wave of regulated initial coin offerings (ICOs) in 2026.

ICO trend could bolster capital formation for crypto in 2026

Bitwise Chief Investment Officer Matt Hougan believes crypto is entering a new chapter in 2026, centered on capital formation and the rebirth of the ICO boom, as the next frontier of financial innovation. 

In a note to investors on Tuesday, Hougan described capital formation — the mechanism by which entrepreneurs raise funds, launch companies, and bring new products to market — as the next "defining theme of crypto in 2026."

He highlighted the ICO boom of 2017–18, which sought to reinvent capital formation by allowing retail investors to invest directly in early-stage crypto projects before they went public.

However, with little to no regulatory oversight, the ICO frenzy shifted into widespread fraud and mismanagement, as bad actors raised billions from unsuspecting participants.

The ensuing fallout prompted the US Securities and Exchange Commission (SEC) to intervene, launching an aggressive enforcement campaign in 2018 that crushed the ICO wave and sent the broader crypto market into a prolonged downturn.

Despite the history behind crypto ICOs, Hougan argued that Securities and Exchange Commission (SEC) Chair Paul Atkins' vision for ICOs and Coinbase's announcement of a token sale platform on Monday could usher in a regulated revival of the trend and set the stage for a new growth cycle in 2026.

Hougan highlighted how Atkins has been an advocated newer and safer forms of ICOs. In July, Atkins delivered a speech advocating for new regulations and safe harbors to facilitate high-quality ICOs.

The Bitwise CIO also expressed optimism at the potential of ICOs to reshape the capital formation market. "I bet we'll see a half-dozen or more billion-dollar ICOs through platforms like Coinbase in 2026," wrote Hougan. That's a small fraction of the amount of money that is raised through the traditional IPO market; for context, in 2024, there were 176 IPOs in the US, raising a collective $33 billion."

He added that if the renewed focus on capital formation proves significant, Coinbase stands to benefit given its strong position in the US crypto market, tagging it as the "Charles Schwab + Goldman Sachs + NYSE" of crypto.

A revival of regulated token sales could also create tailwinds for major programmable blockchains such as Ethereum (ETH) and Solana (SOL), which are likely to host many of the upcoming projects.

More broadly, Hougan framed the potential resurgence of ICOs as a key validation of crypto's continued evolution, marking another step in the industry's effort to reshape modern finance.