An analysis says bitcoin's theoretical fair value could rise to $224,000.

On June 2, blockchain outlet Cointelegraph reported that asset manager Bitwise said a valuation model that reflects government bond default risk suggests the long-term investment case for bitcoin could strengthen as global debt burdens and bond market stress increase.

Bitwise pointed to rising global debt. The Organisation for Economic Co-operation and Development (OECD) estimated that government and corporate borrowing worldwide would reach about $29 trillion this year. That is about 17 percent higher than in 2024 and nearly double the level a decade ago. About 78 percent of government borrowing by OECD member countries is expected to be used for refinancing to repay existing debt rather than for new investment.

Bitwise cited Japan's government bond market as a key warning sign. Japan's 10-year government bond yield has recently risen to 2.78 percent, and the 30-year yield hit a record high. Japan's public debt is about 230 percent of gross domestic product. It also pointed to Japanese investors holding about $1.2 trillion in U.S. Treasuries, while higher domestic rates are reducing the appeal of investing in U.S. Treasuries.

In practice, the hedged yield on the U.S. 10-year Treasury has fallen below Japanese government bond yields, raising the possibility that funds could return to Japan's domestic bond market.

Bond market strains are also being detected in the United States. The U.S. 30-year Treasury yield briefly rose to 5.11 percent last month, the highest level since 2007. Swap spreads, which reflect sovereign credit risk, have also widened to the highest level since the European debt crisis. Bitwise said this situation could weigh on risk assets in the short term.

It said that if bond market instability deepens and central banks provide liquidity to stabilise financial markets, the environment could instead become positive for bitcoin. Bitwise cited a valuation model developed by bond analyst Greg Foss (그레그 포스) and said that if bitcoin is widely adopted as a hedge against sovereign default risk, its fair value could reach about $224,000. The company also stressed that the figure is a theoretical estimate, not a price target.

Its short-term outlook was relatively cautious. Bitwise said high real interest rates and tight financial conditions are limiting demand for bitcoin. Real rates are calculated by subtracting inflation from policy rates, and higher real rates increase the relative attractiveness of cash and bonds. By contrast, when real rates fall, the environment tends to become more favourable for alternative assets such as bitcoin.

Bitwise said bitcoin's 2021 bull market coincided with falling real rates, while the 2022 bear market unfolded alongside aggressive rate hikes. Real rates remain high, but it forecast that if the U.S. Federal Reserve holds rates steady even as inflation rises, real rates could fall and have a positive effect on bitcoin.

The market has also offered an upper-range medium- to long-term outlook. Bitcoin researcher Sminston (스민스턴) cited a logarithmic price model called the Bitcoin Decay Channel and presented a late-2026 bitcoin price range of $90,000 to $255,000.

The industry sees interest rates and liquidity conditions determining price direction in the short term, but believes that in the long term expanding sovereign debt and changes in trust in currency could strengthen the investment case for bitcoin.