Bitcoin Gains Favor Over Traditional Safe Havens Amid US Debt Ceiling Concerns

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Investors are flocking to Bitcoin as a preferred investment option over traditional safe-haven assets such as the US dollar, Yen, and Swiss franc amid concerns over the U.S. debt ceiling default risk, according to Bloomberg’s latest MLIV Pulse survey. This financial movement sees Bitcoin’s price rallying over $35,000 as more funds are allocated to the cryptocurrency.

The popularity of Bitcoin as a secure investment choice comes at a time when the US faces a debt ceiling predicament that could spell disaster for the global financial system. In response, investors are shifting their focus from traditional havens to alternative assets. Between May 8-12, the Bloomberg MLIV Pulse survey revealed that investors opted for gold, treasuries, and Bitcoin over the US dollar, Japanese yen, and Swiss franc.

An increasing number of professional and retail investors find reassurance in Bitcoin as a safe haven. The survey shows that 7.8% of professional investors and 11.3% of retail investors prefer to invest in Bitcoin. In contrast, 51.7% of professional and 45.7% of retail investors lean toward gold, while government bonds remain a popular choice for 14% of professionals and 15.1% of retail investors.

Experts now believe that the US debt default risk is higher than in 2011, potentially affecting the US dollar’s status as the primary global reserve currency. President Joe Biden has expressed his concerns, stating that “the whole world is in trouble.” JPMorgan Chase & Co. CEO Jamie Dimon referred to the situation as “potentially catastrophic,” while the International Monetary Fund warned of “very serious repercussions.”

Despite these risks, Bitcoin’s price has increased 2% in the last 24 hours, trading at $27,368. While it experienced lows of $26,762 and highs of $27,365 within the same timeframe, investors remain optimistic. As inflation subsides and traders anticipate the US Federal Reserve cutting rates, Bitcoin’s price is projected to hit $35,000 soon.

This growing interest in Bitcoin as a safe-haven asset represents a potentially significant shift in market dynamics. With the US debt crisis raising concerns, investors are more inclined to explore unconventional investments that might offer stability and long-term growth. And although gold and government bonds are leading the way as preferred assets, Bitcoin’s increasing popularity among both professional and retail investors cannot be ignored.

However, the decision to invest in cryptocurrencies still requires a thorough understanding of market conditions and research. As personal opinions of financial analysts can influence market trends, investors should exercise caution and assess potential risks to avoid personal financial loss.

Source: Coingape

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