The opportunities in altcoins are probably bigger and more plentiful than ever before, according to Bitwise chief investment officer Matt Hougan.

In a new note to investors, Hougan says that the situation for altcoins “is more complex” than it was in previous bull markets since there isn’t any major new application driving interest like in 2020 or 2017.

Hougan says the main narrative in altcoins right now is memecoins, which has turned out to ultimately have been a short-term casino environment that lacks substance for serious investors.

However, the investor says long-term, “the setup for altcoins is stronger than at any point in history.”

“For the past four years, altcoins have largely been in a regulatory gray zone, with the SEC (Securities and Exchange Commission) alleging that most are illegal securities offerings. This has stunted real-world adoption and kept large firms and the best developers from building in the space.

All that has been reversed. Today, the US has made the growth of stablecoins a national priority, which will support the growth of Ethereum and Solana. Today, the largest institutions in the world feel safe building on crypto, which will bring DeFi (decentralized finance) applications to the masses.

If you squint, you can see evidence of this shift in things like stablecoin AUM (assets under management), which recently hit an all-time high, or in new projects like Ondo Finance’s recent move to tokenize all stocks and ETFs (exchange-traded funds) in the U.S. That project would never have gotten off the ground under the past administration.

In a year or two, my guess is that you’re not going to have to squint to see the transformation in altcoins; the impact will be self-evident. And overwhelming.”

Hougan also highlights that sentiment in crypto is extremely low right now, and while it’s hard to identify a specific catalyst for price expansion, he says it’s “harder to imagine a scenario where the market isn’t significantly bigger in the next few years.”