Matt Hougan, Chief Investment Officer at Bitwise, suggests that Bitcoin is positioned for long-term growth across various economic scenarios. In his recent memo, he identified three potential paths: an AI-driven productivity boom, a recession caused by an AI market collapse, or a period of moderate economic growth.
The analysis follows a report showing US consumer prices rose 3.7% annually in September, exceeding the 3.6% forecast. Core inflation also rose 0.3% monthly, surpassing the expected 0.2%. Following these figures, the probability of a 25 basis point rate hike at the October 28 Federal Reserve meeting increased to 41.5%, up from 22% on Tuesday.
Bitcoin's price reacted to the inflation data, dropping below $82,000 and trading between $81,500 and $82,000 on Wednesday. Hougan noted that while Bitcoin may face short-term volatility, such as its 50% decline during the March 2020 pandemic, it remains supported by institutional adoption and ETF inflows.
Hougan highlighted that even if aggressive rate hikes trigger a recession, subsequent monetary stimulus could aid a recovery. He also identified potential risks to his thesis, including threats from quantum computing, government restrictions, and shifts toward stricter fiscal policies.
