Bitwise’s European research division has estimated Bitcoin’s fair value at $224,000, using a model that links the cryptocurrency’s valuation to sovereign default risks across G20 nations.
The framework is based on a model developed by analyst Greg Foss in 2021, which views Bitcoin as a non-correlated hedge against major sovereign debt defaults. The $224,000 fair value estimate is derived from the weighted probability of default among G20 countries and the market capitalization of the bonds assumed to be insured under the model.
According to the report, sovereign debt stress is no longer a purely theoretical concern. Japanese 30-year government bond yields recently reached record highs, while the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) project approximately $29 trillion in sovereign and corporate borrowing from bond markets this year, representing a 17% increase from 2024 levels.
The report also noted that 10-year swap spreads, a key measure of sovereign risk premiums, have climbed to their highest levels since the European debt crisis of 2011–2012, highlighting growing concerns over global debt sustainability.
However, Bitwise identified a near-term headwind for Bitcoin. Strategy’s STRC perpetual preferred equity has traded below par value as rising global bond yields have reduced its attractiveness to investors.
Strategy has been a major driver of institutional Bitcoin demand, accounting for roughly two-thirds of demand through treasury companies and exchange-traded products (ETPs) through 2026. As a result, any slowdown in Bitcoin accumulation funded through STRC could remove a significant source of market inflows.
From a valuation perspective, Bitcoin’s market-value-to-realized-value (MVRV) ratio currently sits in the lower half of its historical range, with only 36% of past readings falling below the current level. By contrast, the NASDAQ 100’s price-to-book ratio is at a record high, with 99% of historical observations below current levels, supporting the view that Bitcoin may remain relatively undervalued compared with some traditional financial assets.