Bitwise CIO says bitcoin wins whether AI booms, busts, or muddles along
Bitcoin benefits no matter how AI plays out
Bitwise Chief Investment Officer Matt Hougan argues that bitcoin could end up higher regardless of whether artificial intelligence drives an economic boom, causes a bubble to burst, or produces only modest growth.
In a client note published Wednesday, Hougan outlined three possible paths for the economy and explained why each one could eventually favor bitcoin.
What happens if the AI bubble bursts
Hougan described a scenario in which an AI investment bubble collapses. In that case, data-center borrowers would default on their loans, insurance companies holding billions in AI-linked bonds would face pressure, and the economy could slide into a recession similar to 2008. He said the odds of a government bailout in that scenario are "nearly 100%," pointing to the geopolitical importance of AI. After an initial selloff in bitcoin, he expects it to "rally hard" as the money supply expands rapidly.
"Because the AI buildout is the biggest infrastructure investment in the history of America, the resulting bailout is the biggest as well," he wrote.
Hougan said a similar outcome could follow if the Federal Reserve raises interest rates enough to trigger a recession. If the Fed does not raise rates and inflation rises instead, he expects more investors to turn to bitcoin as a store of value, meaning an asset held to preserve wealth rather than generate income.
The AI boom scenario
If AI succeeds in boosting productivity and GDP dramatically, Hougan called it a world of "superabundance." Software, legal work, design, pharmaceuticals, and diagnostics would all become much cheaper. But he argued that certain scarce assets would still rise in value, including waterfront land, fine art, gold, and bitcoin.
The soft-landing path
In a third scenario where the economy grows at about 3%, interest rates stay near 4%, and AI-related debt can still be paid off, Hougan said bitcoin would benefit from its existing sources of demand. These include continued inflows into bitcoin exchange-traded funds, known as ETFs, which allow investors to buy exposure to bitcoin without holding it directly. Rising adoption by financial advisors and more corporate and sovereign balance sheet allocations would also support the market, he said. "Bitcoin wins by showing up," he wrote.
Risks to the thesis
Hougan warned that bitcoin would not necessarily rise in a straight line. He pointed to the roughly 50% drop in bitcoin's price in just a few days during the COVID panic in early 2020. He also said his outlook could be undermined by quantum computing threats, a coordinated government crackdown on crypto, or Western governments returning to fiscal austerity, though he called those outcomes unlikely.
In June, Hougan described crypto as a "contrarian bet" while investors were flocking to AI stocks. In July, Bitwise Senior Investment Strategist Juan Leon told The Block that bitcoin's price floor was rising despite the AI boom and regulatory delays.
Why this matters
The AI investment boom has drawn massive capital and attention away from crypto. Hougan's argument suggests that even if the AI cycle stumbles or cools, bitcoin could still benefit indirectly through government policy responses and ongoing institutional demand.
Confirmed and unconfirmed points
What is confirmed: Hougan made these claims in a written note to Bitwise clients on October 14, 2026, and The Block published the report on October 15, 2026. His specific figures, including the "nearly 100%" bailout estimate and the 3% growth / 4% rate soft-landing scenario, come from that note.
What is still unclear: The scenarios are Hougan's analysis, not predictions backed by independent data. The claim that bitcoin would recover and rise in each path is an opinion, not a proven outcome.
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Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.