A new model from Bitwise pegs Bitcoin’s (CRYPTO: $BTC) fair value at $224,000 U.S.
Bitwise, a private asset management firm, says that Bitcoin’s theoretical fair value would be $224,000 U.S. if the asset were used as insurance against G20 sovereign debt defaults.
The model is based on a theoretical framework that treats Bitcoin as a credit default swap on sovereign or government bonds.
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The implied $224,000 U.S. fair value depends on the weighted default probability across group of 20 (G20) sovereign bonds and the market capitalization of the bonds being insured.
The International Monetary Fund (IMF) has warned that governments and companies are set to borrow a combined $29 trillion U.S. from bond markets this year, 17% higher than in 2024.
The IMF warns that markets are becoming less forgiving and investors are questioning the limits of government borrowing capacity.
Bitcoin is currently trading just below $66,000 U.S. on June 3 after sliding from $71,000 U.S. earlier in the week.
The research team at Bitwise stresses that its fair value figure is a theoretical model only and not a price target or forecast for BTC.
