Bitwise CIO Says Bitcoin Could Benefit Across Three Scenarios

Bitwise Chief Investment Officer Matt Hougan argued in an October 14 memo that Bitcoin could ultimately benefit under three economic scenarios: an AI-driven boom, a recession caused by an AI investment bust, or moderate growth. He said the routes to potential gains differ and cautioned that Bitcoin could fall before recovering. In a productivity boom, Hougan expects AI to make many goods and services cheaper, increasing the relative appeal of scarce assets such as Bitcoin, gold and land. In a recession scenario, defaults among borrowers financing data centers and pressure on insurers holding AI-linked debt could deepen a downturn, he wrote. Bitcoin might initially decline with other risk assets, then recover if policymakers respond with rate cuts, financial support and monetary expansion. Hougan put the likelihood of a bailout in that scenario at nearly 100%, citing AI’s geopolitical importance. His third scenario assumes modest growth and continued demand from exchange-traded funds, financial advisers, and corporate and sovereign allocations. In that case, Hougan said, Bitcoin could gain without an emergency policy response.