Bitwise Research Estimates Bitcoin’s Fair Value at $224,000 Amid Sovereign Debt Concerns
- Bitwise’s research suggests a theoretical fair value of bitcoin at approximately $224,000 if used as portfolio insurance against G20 sovereign debt defaults.
- The estimate is based on a model proposed by analyst Greg Foss in 2021, treating bitcoin as a credit default swap on sovereign bonds.
- Japanese government bond yields have reached record highs, contributing to concerns over the sustainability of sovereign borrowing, with an expected $29 trillion to be borrowed from bond markets this year.
- Japan’s debt-to-GDP ratio stands at approximately 230%, making its JGB market particularly vulnerable.
- Bitcoin was trading near $66,300 after a decline from above $71,000 earlier in the week.
The report highlights significant stress in sovereign bond markets and potential implications for bitcoin‘s role as a hedge against sovereign risk. It also notes that higher global bond yields may affect institutional demand for bitcoin.
With the estimated fair value of bitcoin at $224,000 linked to G20 debt defaults and current trading around $66,300, the divergence from its historical valuation remains notable.
