U.S. government debt has approached the $40 trillion mark, and Bitwise Chief Investment Officer Matt Hougan is advising investors to stop choosing between AI stocks and Bitcoin — and instead own both. According to Hougan, the strategy is a pragmatic way to hedge against two opposite scenarios that could define the U.S. economy.
Hougan's logic is built around Treasury Secretary Scott Bessent's plans to keep GDP growth above 3% while reducing the deficit. He argues this fiscal drama has only two possible endings. If the Treasury succeeds in growing its way out of debt through explosive AI-driven productivity, then chip and infrastructure stocks could see outsized profits. Hougan pointed to strong year-to-date performance from Micron Technology, up 224.97%, and AMD, up 108.80%, as evidence that this foundation is already being laid.
Short-term pullbacks, such as Broadcom's 25.84% decline over three months or CrowdStrike's 7.24% weekly drop, are viewed by Hougan as temporary profit-taking. "If Bessent is right and we grow our way out of this, you desperately need to be long AI stocks," Hougan stated.
If GDP growth fails to accelerate, however, the Treasury may have to devalue the debt through high inflation — inflating its way out. Under those conditions, Hougan sees Bitcoin as the main crisis hedge. He noted that Bitcoin passed a severe stress test in 2026: by July, BTC had fallen 33% year-to-date amid tight monetary policy, but in August it delivered a powerful V-shaped rebound, reducing its year-to-date decline to 10.91%.
Hougan highlighted the mutual offset between the two assets. During the summer, when Bitcoin fell by a third, surging semiconductor stocks carried investors' portfolios. By late August, the AI sector entered a correction, while Bitcoin's rally protected investors from broader losses. "If Bessent is right and we grow our way out, you want to be long AI stocks. If Bessent is wrong and we inflate our way out, you want to be long bitcoin. If you want to win in either scenario, own both," Hougan concluded.
