- According to a survey conducted by Bloomberg, a greater number of investors expressed a preference for investing in Bitcoin rather than the US dollar in the event of a default.
- However, gold emerged as the preferred choice among investors, largely due to its longstanding reputation as a safe asset and recent price increases.
- Treasury bonds were ranked as the second choice, with many investors believing that the United States would ultimately fulfill its debt obligations.
In the event of a US default, retail investors show a preference for Bitcoin over the dollar, highlighting the cryptocurrency's appeal as a safe haven asset, according to Bloomberg's recent Markets Live Pulse survey
The survey results revealed that gold topped the list, with 51.7% of professional investors and 45.7% of retail investors favoring the precious metal.
Treasurys came in second place, chosen by 14% of professionals and 15.1% of retail investors. Bitcoin followed closely behind, with 7.8% and 11.3% of professionals and retail investors, respectively, selecting it as their preferred choice, compared to 7.8% and 10.2% who chose the dollar.
A potential default could occur as early as June 1 if lawmakers fail to raise the $31.4 trillion debt ceiling before the government exhausts its funds. The survey also found that 41% of respondents anticipate a weakening of the US dollar in the event of a default, which could accelerate the trend of de-dollarization.
Bitcoin has previously rallied during times of financial stress, such as the banking crisis triggered by the Silicon Valley Bank collapse earlier this year. Standard Chartered has attributed this to Bitcoin's decentralized nature and estimated that a default could drive the cryptocurrency's value up by approximately $20,000.
Analysts also anticipate that gold would likely experience a rise in value during a default, further caused by a weakening dollar. Continued gold purchases by central banks and flexible global monetary policies could also provide support for the precious metal.
Regarding Treasurys, UBS has predicted that bonds would rally if the debt ceiling issue remains unresolved, as economic contraction would likely occur and investors would still consider US debt a relatively safe.
