Bitcoin Would Be More Trusted Than Dollar in US Default, Survey Says

• More investors backed bitcoin than the dollar as the preferred investment during a default, a Bloomberg survey found.
• But gold was the top choice, due to its history as a safe haven asset and recent price gains.
• Treasurys were the second choice, as most expect the US would still meet its debt obligations eventually.

In the case of a US default, retail investors favor bitcoin over the dollar, underlining the token’s appeal as a safe haven asset.

That’s according to Bloomberg’s most recent Markets Live Pulse survey, which asked investors what they would buy if the US hit its debt ceiling. 

To be sure, gold led the list of responses, with 51.7% of professional investors and 45.7% of retail investors preferring bullion.

In second place came Treasurys, drawing 14% of professionals and 15.1% of retail investors. Bitcoin followed with 7.8% and 11.3%, respectively — versus the dollar’s 7.8% and 10.2%.

A default could arrive as soon as June 1, if lawmakers fail to lift the $31.4 trillion debt ceiling before the government runs out of money.

Bloomberg’s MLIV survey also found that 41% expect greenback would weaken in a default, which could also accelerate de-dollarization trends.

Meanwhile, bitcoin rallied in an earlier period of stress this year, namely the banking crisis sparked by the collapse of Silicon Valley Bank.

Previously, Standard Chartered told Insider that this is largely due to bitcoin’s decentralized mechanism, and estimated that a default could push the cryptocurrency up by about $20,000.

Other analysts told Insider that they expect gold would likely climb in a default as well. A weakening dollar could further propel the metal. Continued purchases of gold by central banks and a loosening of global monetary policy could also help support it.

As for Treasurys, UBS has previously predicted bonds would rally if the debt ceiling doesn’t get resolved, as this would most likely lead to economic contraction and investors would still see US debt as a relatively safe haven.