Bitcoin (BTC) could become the third most sought-after asset in the world if the U.S. were to default on its debt, according to Bloomberg News’ latest MLIV Pulse survey.
According to the survey, many investors now consider BTC to be a king of “digital gold” and it has become more popular than every fiat currency — including investor staples like the U.S. dollar, the Japanese yen, and the Swiss franc.
The survey was conducted between May 8 and May 12. It included responses from a mix of 637 professional and retail investors.
Gold, Treasuries & Bitcoin
The survey revealed that professional and retail investors rank gold, treasuries and Bitcoin as the top three assets to purchase as a hedge against the hypothetical debt default scenario, respectively.
Bitcoin came in third place, with approximately 8% of professional investor respondents and 11% of retail investor respondents saying they intend to purchase Bitcoin as their primary hedge against a debt default scenario.
Gold has historically been the most popular hedge for both professional and retail investors over the history of the financial markets and continues to reign supreme as the most popular hedge against turmoil in the financial markets.
More than 50% of the 637 respondents intend to buy real gold if the U.S. defaults. However, this also makes it an expensive hedge, considering the precious metal is trading very close to its all-time high of $2075.
Meanwhile, both professional and retail investors rank U.S. Treasuries at second place, despite signs that they could be the catalyst for a default. Markets think treasuries will be profitable in the long term even if the U.S. defaults, which has been the case before.
Default risk higher than ever
The U.S. is fast approaching its debt ceiling and could potentially run out of cash to continue making its debt payments.
In May, U.S. Treasury Secretary Janet Yellen said this could happen as early as June 1 if the ceiling is not raised, which has given rise to a lot of concern in the markets.
The last time the U.S. debt ceiling was at such a precarious level was in 2011. At the time, the U.S. decided to raise the ceiling and print more money to avoid a full default.
The Biden administration is set to meet and discuss the matter with Congress on May 16 and the U.S. government may decide to suspend the limit once again.
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