Bitwise Model Values Bitcoin at $224,000 in Sovereign-Debt Hedge Scenario

Bitwise Europe has put forward a model-implied bitcoin fair value of roughly $224,000, based on a framework that treats BTC as a form of portfolio insurance against sovereign debt defaults. The report, published this week, emphasized that the number is an illustrative output rather than a forecast or price target.

The model matters because it frames bitcoin less as a speculative technology asset and more as a potential hedge against government credit risk. According to CoinDesk, the approach draws on a 2021 framework from analyst Greg Foss that compares bitcoin to a credit default swap on G20 sovereign bonds, using weighted default probabilities and the size of the bond market being notionally insured.

Bitwise built the argument around pressure in sovereign bond markets. The report pointed to record highs in Japanese 30-year government bond yields, multi-decade peaks in 10-year Japanese government bond yields, elevated sovereign risk premia, and warnings from the IMF and OECD that governments and companies are expected to borrow $29 trillion from bond markets this year, 17% more than in 2024.

Japan was highlighted as a particular area of concern because of the scale of its government bond market, its large U.S. Treasury holdings and its debt-to-GDP ratio of roughly 230%. Bitwise also noted that 10-year swap spreads across major sovereign bonds are at their highest levels since the 2011-2012 European debt crisis.

The report did not present a one-way bullish case. It cited near-term headwinds, including weaker demand tied to Strategy’s STRC funding vehicle, which has traded below par as higher global bond yields made its preferred equity dividends less attractive. Bitwise said Strategy-related buying has represented a large share of institutional bitcoin demand through 2026 to date, so any slowdown could weigh on flows.

Bitwise also pointed to a valuation gap between bitcoin and large U.S. technology stocks. The report said bitcoin’s market-value-to-realized-value ratio sits in the lower half of its historical range, while the Nasdaq 100’s price-to-book ratio is at a record high. Bitcoin was recently trading near $66,300 after falling from above $71,000 earlier in the week, according to CoinDesk.