Major cryptocurrency Bitcoin (BTC) could become a top-three asset in the event of a theoretical debt default in the United States, according to a new survey.
As U.S. President Joe Biden prepares to meet with Congress on May 16 to discuss the U.S. debt ceiling, investors are seeking hedges to protect their savings in the event of default.
Gold, U.S. Treasury Bonds and Bitcoin would be the top three assets, should the U.S. fail to raise its debt ceiling and default on its debt, data from Bloomberg’s latest Markets Live Pulse survey suggests. The survey was conducted from May 8 to May 12, involving a total of 637 respondents including professional and retail investors.
More than 50% of finance professionals would buy gold in case the U.S. government fails to avoid a debt default. U.S. Treasury Bonds would be the second-most popular asset in such a scenario. The poll suggests that Bitcoin would be the next go-to alternative for retail investors.Data from Bloomberg MLIV Pulse survey. Source: Bloomberg
This made Bitcoin a more popular choice than the U.S. dollar, the Japanese yen or the Swiss franc. According to the survey’s data, about 8% of professional investor respondents and 11% of retail investor respondents said they are more willing to buy Bitcoin.
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The poll comes as markets grow increasingly nervous about the U.S. debt ceiling. In early May, Treasury Secretary Janet Yellen warned that the U.S. risks a catastrophic default as soon as June 1 if the debt limit isn’t suspended or raised. President Biden subsequently declared that the “whole world” would be in trouble if the U.S. defaulted on its debt.
According to the Bloomberg MLIV Pulse survey, nearly 60% of respondents said the risks are bigger this time around than in 2011. 41% of respondents also believe that a default poses a direct threat to the U.S. dollar as the primary global reserve currency.
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