According to a report by CryptoBriefing, Bitwise has published a new research paper that employs a credit default swap (CDS) model to estimate Bitcoin's fair value. The model arrives at a figure of approximately $224,000, which is more than double the current trading price of around $108,000, indicating that Bitcoin may be substantially undervalued in the current macro environment.
How the CDS Model Prices Bitcoin
The valuation framework was developed by credit market veteran Greg Foss. Its core principle treats Bitcoin as a non-sovereign, fixed-supply asset that can hedge against sovereign default risk. Foss applied the CDS pricing mechanism—traditionally used to gauge the probability of sovereign bond defaults—to the Bitcoin market. By assessing the level of credit risk embedded in global sovereign debt, the model derives what Bitcoin should be worth as a safe-haven asset. This approach moves beyond technical charts and on-chain data, providing a credit-market lens to quantify Bitcoin's hedging properties.
A CDS contract is essentially an insurance tool where the buyer pays periodic premiums in exchange for a payout if a bond defaults. Following this logic, Foss's model posits that if the market is willing to pay to insure against sovereign credit risk, then Bitcoin—being entirely free from any government influence—deserves a corresponding market pricing.
Global Debt Pressures and Market Signals
To illustrate the current stress in sovereign debt markets, the report highlights several key data points. In 2026, global governments and corporations will need to borrow around $29 trillion to refinance existing obligations, a staggering figure that underscores the heavy reliance on debt financing worldwide. Among major economies, Japan's public debt has reached 230% of GDP, consistently ranking at the top among developed nations. Meanwhile, the yield on the US 30-year Treasury bond climbed to 5.11% in May 2026, the highest level since 2007. Rising long-term interest rates directly inflate government interest costs and could reignite concerns over debt sustainability.
Bitwise notes in the report that if these pressures eventually force central banks to implement emergency rate cuts or launch quantitative easing programs, the purchasing power of fiat currencies could be eroded. Bitcoin, with its fixed supply of 21 million coins and immunity to central control, would likely become a prime beneficiary in a liquidity-flooded environment. The $224,000 valuation thus reflects a safe-haven logic grounded in systemic risk analysis.