As the United States prepares for a critical meeting between President Joe Biden and Congress on May 16th to discuss the U.S. debt ceiling, investors are searching for assets that could potentially protect their savings in case of a default. According to a recentBloomberg Markets Live Pulse survey, gold, U.S. Treasury Bonds and Bitcoin (BTC) would be the top three assets, should the U.S. fail to raise its debt ceiling and default on its debt.
The survey, which was conducted from May 8th to May 12th and involved a total of 637 respondents, including both professional and retail investors, revealed that 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. Interestingly, Bitcoin was found to be the next go-to alternative for retail investors.
Compared to traditional safe-haven assets such as the U.S. dollar, the Japanese yen, or the Swiss franc, Bitcoin emerged as a more popular choice. Approximately 8% of professional investor respondents and 11% of retail investor respondents indicated they are more willing to purchase Bitcoin amid looming uncertainties surrounding U.S. debt.
Market participants are increasingly nervous about the U.S. debt ceiling, and it comes as no surprise that discussions around potential alternatives gain traction. In early May, Treasury Secretary Janet Yellen warned that the United States risks a catastrophic default if the debt limit is not suspended or raised by June 1. Furthermore, President Biden stated that the “whole world” would be in trouble if the United States defaulted on its debt.
According to the same Bloomberg survey, nearly 60% of respondents said the risks are bigger this time around than in 2011, reflecting heightened anxiety amongst market participants. In addition, 41% of respondents believe that a default poses a direct threat to the U.S. dollar’s status as the primary global reserve currency.
The growing interest in Bitcoin as a potential safe-haven asset amidst this uncertainty underlines the shifting perceptions of cryptocurrencies in the broader financial landscape. With Bitcoin’s increasing acceptance and adoption, it is not too far-fetched to imagine a future where it plays a more prominent role in investors’ portfolios, particularly during times of economic strife.
In conclusion, although caution is warranted given the unpredictable nature of the markets and the inherent risks in cryptocurrencies such as Bitcoin, the results of this survey clearly demonstrate that investors are not only becoming more receptive to the idea of diversifying their assets but also actively considering alternative investments in the face of potential economic turmoil. Whether Bitcoin will eventually cement its place as a viable safe-haven asset amidst widespread instability remains to be seen, but its increasing popularity amid uncertain times cannot be ignored.
Source: Cointelegraph
