Bitwise Chief Investment Officer Matt Hougan says the range of possible macro outcomes is the widest he has seen in his career, and that Bitcoin wins in nearly all of them.
In a note titled Choose Your Own Macro Adventure, published on Bitwise’s CIO memos page on Wednesday, Hougan borrows the format of the children’s books where different choices lead to different endings. His argument is that, for Bitcoin, almost every path ends in the same place.
He frames the debate as running from pundits who expect AI to double GDP to those who warn it could cause human extinction.
Path one: AI superabundance
If AI drives a surge in productivity, work based on intelligence becomes cheap.
In that world, Hougan argues, value moves to things that cannot be reproduced, such as waterfront land, gold and Bitcoin.
Path two: the AI bubble bursts
If the AI investment boom collapses, Hougan sees the risk of a 2008-style recession. Bitcoin would sell off at first alongside other risk assets.
He then puts the chance of a government bailout at “nearly 100%”. He calls the AI buildout “the biggest infrastructure investment in the history of America”, so the money printing needed to rescue it would be large.
“This is exactly the environment bitcoin was built for,” he writes.
Path three: muddle through
The third scenario is roughly 3% growth with interest rates around 4%.
Here, Hougan expects Bitcoin to keep gaining from steady sources of demand: ETF flows, adoption by financial advisers, and corporate and sovereign allocations as government debt keeps growing.
“Bitcoin wins by showing up,” he writes.
The caveats
Hougan does not promise a smooth ride. He points to the COVID panic of March 2020, when Bitcoin fell 50% within days before rebounding roughly 20-fold.
He also names risks that sit outside his macro framework, including a coordinated global government crackdown and the threat quantum computing could pose to older wallets.
His conclusion is that the big macro questions “matter less than most people think”.
Readers should note that Bitwise runs a spot Bitcoin ETF and so has a commercial interest in demand for Bitcoin.
Bitcoin was trading around $82,000 at the time of writing.
