The US national debt has already exceeded $36 trillion, which is a record 123% of GDP. Further deterioration of the macroeconomic situation could lead to more serious consequences, including increased risks in the bond market.
“Risks of sovereign default are rising around the world amid record levels of government debt as a percentage of GDP. Particularly alarming signals are coming from France and the UK, where the fiscal situation is of particular concern to bondholders,” analysts noted.
However, historically, uncertainty has had a mixed impact on the price of Bitcoin, with periods of growing fears often contributing to increased interest in cryptocurrencies as an alternative asset.
“In theory, Bitcoin, with its current fair price of around $219,000, could serve as a portfolio insurance against default of a basket of the largest sovereign bonds,” Bitwise said.
Analysts have pointed out that Bitcoin’s limited supply and lack of counterparty risk strengthen its position as a reliable defensive asset. However, high volatility remains an integral feature of cryptocurrency – the tendency for sharp falls in conditions of uncertainty creates risks for investors seeking stability in times of crisis.
Earlier, specialists from the Wintermute platform said that this year the volatility of Bitcoin and other major cryptocurrencies may decline, and also did not rule out the creation of a state reserve of the first cryptocurrency in China, the UAE and the European Union.
Source: Bits
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