Bitwise CIO Matt Hougan explains why Bitcoin could emerge as a winner in the AI trade
Well, I guess maybe going full circle to what we opened on in in terms of the headwinds that are kind of outside of crypto that crypto is facing now. Uh you mentioned a lot, a few of them. Uh I think the political pressures are maybe some things that are new kind of seeing what's happening. We'll see what happens with the elections, but if it is indeed the case that the pendulum swings back into maybe a less pro crypto regime in Congress, how do you do are right now are our investors kind of bringing that up in the discussions you're seeing at Bitwise?
Uh we definitely hear it from institutions. There's an easy answer to that, which is that this election doesn't matter that much, right? Let's imagine it's a a democratic swing. What are we going to get? We're going to get investigations into meme coins. We're going to get investigations into things like Trump coin and Melania coin and World Liberty Financial. Of course, that's what they'll do, but we're not going to get a new SEC. So what we tell institutions is that the election that matters is 2028, not 2026.
Because we have two more years at least of an extraordinarily pro crypto SEC. My view is that crypto is going to make enough strides in the next, call it 27 months that it won't be able to be undone regardless of what happens in 2028. But for sure, around this election, you're going to see some panic and freak out. Our view is that crypto is in sort of a a a dip then rip uh situation where we're going to face volatility around the midterm elections, but ultimately that doesn't matter.
Uh and we will recover into the end of the year into 2027, but for sure people are worried about it.
We might be in the dip right now. Uh so I think there's probably a lot of viewers out there looking forward to the rip as you describe it. But but for the dip right now, I think there's a lot of questions around AI. and I know you've been talking about, it doesn't really matter what happens with this AI bubble if you want to call it one. How do you kind of look at that uh and explain it to investors? Because right now it does seem to be leading where markets go in general.
Well, I mean, if you think about, there are really three things that can happen in AI, right? We get super abundance and we live in an economic paradise. We muddle along like we have been for the past few years, or there's an AI bubble and we enter a dot com style pullback. Take each of those scenarios. Imagine super abundance. In that world, Bitcoin does extraordinarily well because scarce goods become extraordinarily valuable. You want coastal real estate and you want Bitcoin.
In the muddle along scenario, you have what we have right now, which is wealth managers adopting Bitcoin, institutions moving towards Bitcoin, fiat debasement continuing. That's a pretty good outlook for Bitcoin. And in the 1999 sort of dot com, I guess 2001.com crash scenario, we get Fed bailouts. That's good for crypto as well. So, I think people are worried about it, but regardless of which path you go on, sort of all those roads lead to Bitcoin doing well.
I don't think it's going to slow us down that much.
