Choose Your Own (Macro) Adventure

When I was a kid, my favorite books were from the “Choose Your Own Adventure” series. In these books, you might be walking down a road in a spooky forest when you meet a dragon, and the book would ask:
Do you want to a) attack the dragon (turn to page 5); b) try to make friends with the dragon (turn to page 21); or c) run away (turn to page 63)?
My favorite part was that you got to see where every path led. If you made this choice, things turned out great; if you made that choice, everyone died.
Sometimes, however, the authors would trick you: They’d give you a choice that didn’t really matter. Whether you went left or right, you ended up in the same place, be it a dungeon or a hall of treasure.
Why I’m Telling You This
Lately, at conferences, I’ve been getting lots of questions that start with: What happens to bitcoin if…
The Fed hikes rates and tips us into recession?
The Fed holds rates steady and inflation spikes?
The AI bubble bursts and we’re thrown into a recession?
AI leads to superabundance and infinite wealth?
The range of outcomes to consider is paralyzing; certainly the widest I’ve seen in my career. Turn on CNBC and, within an hour, you’ll hear one expert say AI will double GDP every year and another say it will lead to human extinction.
How do you plan for that?
The answer is to do what I did as a kid: Walk down every path to see where it ends.
Consider the various paths that AI might take, and how bitcoin would likely respond:
Option 1: AI delivers superabundance (turn to page 12). In this world, productivity explodes and GDP soars. Anything that is mostly intelligence-based—like software, legal work, design, pharmaceuticals, or diagnostics—gets very cheap. Every day feels like Louis Armstrong’s “What a Wonderful World.”
Abundance is a tailwind for scarcity, because value migrates to the things that can’t be reproduced: waterfront land, great art, gold, and (of course) bitcoin. So in this “adventure,” bitcoin wins.
Option 2: The AI bubble bursts (turn to page 20). In this reality, high-growth assets sell off as the global economy plunges into recession. Data-center borrowers default and insurance companies that own billions in AI-linked bonds face challenges. It’s 2008, redux.
Initially, bitcoin trades down with other risk assets. But we all know what happens next: Rate cuts, balance-sheet expansion, and a bailout.
Because the AI buildout is the biggest infrastructure investment in the history of America, the resulting bailout is the biggest as well. And because of the geopolitical importance of AI, the odds of a bailout strike me as nearly 100%.
And here’s what I see happening next: Money supply surges and bitcoin rallies hard. This is exactly the environment bitcoin was built for.
Option 3: We muddle along with 3% growth and 4% interest rates (turn to page 41). Nothing dramatic happens. AI adds some economic growth but nothing transformative. AI-linked debt is serviced and we get something approaching a soft landing.
In this world, bitcoin just keeps doing what it’s been doing: more ETF flows, more adoption from advisors, and more corporate and sovereign balance sheet allocations. Government debt keeps piling up and demand for store-of-value assets keeps rising. Bitcoin wins by showing up.
All Roads (Still) Lead to Bitcoin
The value of the exercise is this: For bitcoin investors, what happens with AI doesn’t matter over the long term. As I see it, every path ultimately ends with bitcoin higher.
Frankly, the same goes for rates. If the Fed hikes aggressively and pushes us into recession, governments are likely to intervene and bitcoin is likely to rally. If they don’t hike and inflation runs hot, watch investors turn to bitcoin as a store of value. If the Fed pulls off a soft landing, turn to page 41 again—I see us going steadily higher.
In almost every scenario I can imagine, one of three things happens: 1) money and credit get created faster than the real economy grows, which favors a fixed-supply asset; 2) the economy gets so productive that scarce things command a premium; or 3) nothing much happens and bitcoin keeps taking share. The paths differ, but the page you land on is the same. It’s the trick from the old books: The choice doesn’t matter.
I’m not saying bitcoin will go up in a straight line. In several of these worlds bitcoin has a challenging stretch before the story resolves. When the Covid panic happened in early 2020, bitcoin fell 50% in a matter of days before it rebounded and rose ~20X.
And of course, the core bitcoin thesis could break for reasons that have nothing to do with macro. Quantum computing could threaten old wallets, governments could coordinate a global crackdown, or Western governments could embrace austerity and return to sound management of their currencies. I think those are unlikely, but they’re not impossible.
But for long-term investors, the big macro questions matter less than most people think. That’s because, of all the different paths the economy can take, virtually all of them still lead to bitcoin.

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