Bitwise Sees Bitcoin at Deep Discount but Warns of Hawkish Fed Risk

Bitcoin has no central issuer and is not backed by sovereign credit, leading some investors to view it as an alternative hedge against government debt risk. Bitwise Europe cited a model proposed by investor Greg Foss in 2021 that treats Bitcoin as analogous to a credit default swap on G20 sovereign bonds, highlighting the importance of global borrowing and refinancing pressures to crypto-asset valuations.

In its June 2026 monthly report, Bitwise Europe estimated Bitcoin's theoretical fair value at about $224,000 based on the size of the G20 bond market and weighted default probabilities. It stressed that the figure was a scenario model, not a price target. The OECD estimates governments and companies will borrow $29 trillion in 2026, up 17% from 2024. Bitcoin traded at about $66,300 when the report was published.

Asset manager Bitwise said Bitcoin’s valuation has already compressed during previous monetary-tightening cycles, meaning market prices may have anticipated high interest rates and shrinking liquidity. The assessment matters because Bitcoin’s potential losses could be smaller than those of traditional equities when new macroeconomic shocks emerge.

The latest analysis shows that rising inflation expectations are reducing market bets on central bank rate cuts. Bitwise, however, believes this policy headwind is largely priced into Bitcoin, giving it better downside protection than stocks. The available information provides no specific publication date, investment amount or quantified decline, and the conclusion remains a relative valuation assessment.