Bitwise CIO: Bitcoin Could Benefit in the Long Term Whether AI Booms or the Bubble Bursts

October 15: Bitwise Chief Investment Officer Matt Hougan said in a report to clients that whether AI drives economic prosperity, the investment bubble bursts, or the economy only grows modestly, Bitcoin could benefit in the long term. In a scenario where the AI bubble bursts and triggers a recession similar to 2008, given AI's geopolitical importance, he believes the probability that governments would subsequently implement bailouts is "close to 100%." Bitcoin may be sold off first, then surge sharply as the money supply spikes.

If AI greatly boosts productivity and GDP and lowers the costs of software and legal services, Hougan expects that still-scarce assets such as Bitcoin will appreciate. If the economy maintains 3% growth, 4% interest rates, and approaches a soft landing, ETF inflows, adoption by investment advisers, and allocations on corporate and sovereign balance sheets could still support Bitcoin.

He cautioned that Bitcoin will not rise in a straight line, and some scenarios may first go through a difficult phase. The threat of quantum computing, coordinated government crackdowns, or Western governments reimposing fiscal austerity could also invalidate his judgment; he believes these situations are unlikely, but not impossible.