Regulated ICOs represent a new pillar of crypto capital formation, enabling compliant token sales on platforms like Coinbase to raise billions safely, addressing past fraud issues and driving the next bull market according to Bitwise CIO Matt Hougan.
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Coinbase’s regulated ICO platform launches in November, starting with vetted project Monad (MON) to ensure transparency and investor protection.
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Bitwise CIO Matt Hougan views compliant ICOs as crypto’s fourth pillar, alongside bitcoin, stablecoins, and tokenization, fostering multitrillion-dollar industry growth.
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This model could generate billions in funding by 2026, rivaling traditional IPOs with lower costs and direct access for retail investors, per industry analysis.
Discover how regulated ICOs are reshaping crypto capital formation with Coinbase’s new platform. Learn about safer token sales, expert predictions, and bull market potential—explore now for investment insights.
What Are Regulated ICOs and How Do They Drive Crypto Capital Formation?
Regulated ICOs are structured initial coin offerings that comply with securities laws, allowing crypto projects to raise funds through vetted token sales on licensed platforms. Unlike the unregulated 2017-2018 ICO boom, which saw widespread fraud, today’s versions emphasize disclosure, insider lock-ups, and oversight to protect investors. Bitwise CIO Matt Hougan positions this as crypto’s fourth pillar, complementing bitcoin’s store-of-value role, stablecoins’ payment utility, and tokenization’s asset efficiency, potentially unlocking trillions in economic activity.
How Does Coinbase’s New ICO Platform Ensure Compliance and Safety?
Coinbase’s platform, launching on November 10, will feature one fully vetted project monthly, beginning with Monad (MON) from November 17-22, ahead of its mainnet on November 24. Strict rules include detailed disclosures, restrictions on insider sales, and adherence to SEC guidelines, as highlighted by Chair Paul Atkins’ advocacy for safe harbors. Hougan notes this self-regulatory approach corrects past ICO flaws, such as misleading promises and lack of accountability, with data from 2024 showing 176 U.S. IPOs raised $33 billion—regulated ICOs could match this scale by 2026 through efficient, global access. Experts like Hougan emphasize that programmable blockchains like Ethereum and Solana will host these projects, enhancing ecosystem maturity with stablecoins and tokenization already in place.
Frequently Asked Questions
What Makes Regulated ICOs Different from Traditional IPOs?
Regulated ICOs differ from IPOs by offering lower entry barriers, faster execution, and direct retail participation without intermediaries, while maintaining compliance through vetted listings and lock-ups. In 2026, they could produce multiple billion-dollar raises, providing entrepreneurs cost-effective funding compared to the $33 billion from 176 U.S. IPOs in 2024, as per Bitwise analysis.
Will Regulated ICOs Trigger the Next Crypto Bull Market?
Yes, compliant ICOs could fuel a sustained bull run by channeling billions into innovative projects, building on bitcoin, stablecoins, and tokenization as foundational elements. Bitwise CIO Matt Hougan predicts this capital formation pillar will attract multitrillion-dollar opportunities, making crypto more robust and appealing for long-term investors seeking diversified exposure.
Key Takeaways
- Capital Formation as Crypto’s Fourth Pillar: Joins bitcoin, stablecoins, and tokenization to disrupt finance, enabling efficient fundraising and job creation in the sector.
- Coinbase’s Role in Regulation: As a comprehensive exchange blending brokerage, investment banking, and listing services, it leads vetted ICOs starting with Monad.
- Investment Opportunities and Risks: Promises billions in raises but demands caution due to volatility, varying regulations, and the need for risk-tolerant strategies.
Conclusion
The emergence of regulated ICOs and platforms like Coinbase’s marks a pivotal shift in crypto capital formation, integrating compliance to mitigate past risks while harnessing bitcoin, stablecoins, and tokenization for broader adoption. As Bitwise CIO Matt Hougan forecasts, this could propel multitrillion-dollar growth and a generational bull market. Investors should monitor developments closely, prioritizing diversified portfolios to navigate this evolving landscape effectively.
Bitwise CIO Hougan calls capital formation crypto’s fourth pillar, alongside bitcoin, stablecoins, and tokenization, driving multitrillion-dollar growth.
Key Highlights
- Coinbase launches regulated ICO platform: The new platform will list fully vetted crypto projects under strict rules, starting with Monad (MON) in November.
- Bitwise CIO predicts next crypto bull run: Compliant ICOs could raise billions, rivaling IPOs, and provide safer, direct access for investors.
- A new era for capital formation in crypto: Regulated token offerings aim to fix past ICO issues and could reshape how crypto projects raise funds.
The cryptocurrency industry may be entering a new chapter of capital formation, according to Matt Hougan, Chief Investment Officer of Bitwise Asset Management. In a note to clients released late Tuesday, Hougan suggested that a fresh wave of compliant initial coin offerings (ICOs) could serve as a major driver of the next crypto bull market.
Hougan highlighted the launch on November 10 of Coinbase’s new token sale platform as a milestone, describing the initiative as signalling “the start of a new, regulated era for initial coin offerings.”
He framed capital formation—the process by which entrepreneurs raise money, build new ventures, and create jobs—as a fourth foundational pillar of crypto’s disruption of traditional finance, following bitcoin’s reinvention of gold, stablecoins’ reinvention of dollars, and tokenization’s reinvention of trading and settlement.
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“These are each multitrillion-dollar opportunities, and enough to power a bull market in crypto for a generation,” Hougan wrote. “I expect that eventually most assets will be tokenized, most dollars will move on stablecoin rails, and bitcoin will be as widely accepted as gold.”
What’s different this time
Hougan noted that ICOs are not a new concept. The boom of 2017–2018 allowed projects to raise capital directly via token sales, but it largely collapsed amid fraud and regulatory crackdowns. The key difference today, he said, is stronger regulation and structured frameworks.
He pointed to calls from Securities and Exchange Commission (SEC) Chair Paul Atkins for safe harbors and compliant token-offering regimes, and highlighted Coinbase’s platform, which will list one fully vetted crypto project per month under strict disclosure requirements and lock-up restrictions for insiders. The first project listed will be Monad (MON), with its token sale slated for November 17–22 ahead of its mainnet launch on November 24.
“In short, through self-regulation, it aims to fix a lot of what was wrong with the 2017–2018 ICO era,” Hougan said.
Outlook and implications
Looking ahead, Hougan predicted that the compliant ICO model could generate “a half-dozen or more billion-dollar ICOs” in 2026, potentially rivaling parts of the traditional IPO market. By comparison, in 2024, there were 176 U.S. IPOs raising a collective $33 billion.
For entrepreneurs, the model could provide lower-cost capital and more direct retail-investor access. For platforms, Hougan named Coinbase as a key beneficiary, describing it as “not just the Charles Schwab of crypto; it’s Charles Schwab + Goldman Sachs + NYSE.” He also noted that large programmable blockchains such as Ethereum and Solana may benefit by hosting many of these new projects.
From a broader market perspective, Hougan said that if the ICO-renaissance narrative plays out, it strengthens the case for crypto exposure because the ecosystem has matured with stablecoins and tokenization already present.
“Crypto is more interesting today than it was a few years ago because we’ve added stablecoins and tokenization to its story. If we start seeing billions more raised through rapid ICOs, that story will only get stronger.”
Risks and caution
Hougan’s note also pointed to the risks in crypto investing. Crypto investing carries significant risks. Prices can move sharply, rules vary between countries, and investors without experience or a high tolerance for risk face real challenges. Past ICO failures, regulatory crackdowns, and the absence of consistent global rules continue to make the market difficult to navigate.
Bitwise says that regulated, compliant token offerings could change how crypto projects raise capital. It’s still unclear whether this approach will fuel a lasting bull market, but it does mark a notable shift in how new crypto ventures connect with investors.
Also Read: Phantom CEO Emphasizes Solana Focus Over IPO and Blockchain
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