Bitcoin (BTC) could become the world’s third most popular asset if the US defaults, according to Bloomberg News’ latest MLIV pulse investigation.
According to the survey, many investors now consider BTC to be the king of “digital gold,” making it more popular than any fiat currency, including staple currencies for investors such as the US dollar, Japanese yen and Swiss franc. It is said that there is
The survey was conducted from May 8th to May 12th. Includes responses from 637 professional and individual investors.
gold, bonds, bitcoin
The survey found that professional and retail investors ranked gold, government bonds and bitcoin respectively as the top three assets to buy as a hedge against a hypothetical default scenario.
Bitcoin came in third, with about 8% of professional investor respondents and 11% of retail investor respondents saying they intend to buy bitcoin as their primary hedge against a default scenario.
Gold has historically been the most popular hedge in the history of financial markets for both professional and retail investors, and continues to be the most popular hedge against financial market turmoil.
More than 50% of the 637 respondents said they would buy real gold if the U.S. defaulted. But given that the precious metal is trading very close to its all-time high of $2,075, it’s also an expensive hedge.
Meanwhile, both professional and retail investors rank US Treasuries second despite their potential trigger of default. Markets believe, and so far, that bonds will pay off in the long run, even if the U.S. defaults.
Default risk higher than ever
The U.S. is fast approaching the debt ceiling and may not have enough cash to continue paying off debt.
U.S. Treasury Secretary Janet Yellen sparked major concerns in the market in May when she said the cap could be raised as early as June 1 if it is not raised.
The last time the U.S. debt ceiling was at such a precarious level was in 2011. At the time, the US decided to raise the cap and print more currency to avoid a complete default.
The Biden administration is scheduled to meet with Congress on May 16 to discuss the issue, and the U.S. government may decide to suspend restrictions again.
