The premier cryptocurrency serves as a portfolio hedge against “sovereign defaults,” with its fair value estimated at approximately $219,000, according to Bitwise experts.
“Sovereign default risks are rising globally amid record levels of government debt relative to GDP. Particularly alarming signals are coming from France and the United Kingdom, where the fiscal situation is causing significant concern among bondholders,” the analysts noted.
They observed that U.S. national debt recently surpassed $36 trillion, amounting to a record ~123% of GDP. This trend raises concerns about the government’s ability to meet its fiscal obligations.
Further deterioration of the macroeconomic situation could lead to more severe economic consequences, including increased risks in the bond market. However, historically, uncertainty has had mixed effects on the price of Bitcoin: periods of rising concerns have often boosted interest in cryptocurrencies as an alternative asset.
According to the experts, if G20 countries’ bonds totaling $69.1 trillion have a default probability of 6.2%, the theoretical “fair price” of the leading cryptocurrency would exceed $200,000.
“In theory, Bitcoin, with its current ‘fair price’ around $219,000, could serve as a ‘portfolio insurance’ against the default of a basket of major sovereign bonds,” Bitwise noted.
Volatility Remains a Barrier
The company emphasized that Bitcoin’s limited supply and lack of counterparty risk strengthen its position as a reliable protective asset. However, high volatility remains an inherent feature of the cryptocurrency—its tendency for sharp declines in uncertain conditions poses risks for investors seeking stability during crises.
On the other hand, the decentralization of digital gold makes it independent of actions by states and financial institutions. This attracts market participants wary of inflation or currency devaluation.
Earlier, Bitwise analysts predicted that the trend of corporate investments in Bitcoin will continue to gain momentum, evolving into a global “megatrend.”