Bitwise has highlighted that Bitcoin's theoretical value could reach $224,000 if it becomes a preferred hedge against increasing sovereign default risks, particularly as global sovereign debt levels rise. Japan's public debt is nearing 230% of GDP, with its 10-year government bond yield climbing to 2.78%. The report notes that Japanese investors hold around $1.2 trillion in US Treasurys, but higher domestic yields may prompt a shift back to local bonds. In the US, 30-year Treasury yields have hit 5.11%, the highest since 2007, indicating rising sovereign risk premiums. Although these trends could negatively impact risk assets in the short term, Bitwise suggests that a deeper disruption in the bond market could lead to increased liquidity from central banks, potentially benefiting Bitcoin. The report also emphasizes that Bitcoin's performance is closely tied to real interest rates, which have historically favored the cryptocurrency when they decline. Additionally, Bitcoin researcher Sminston forecasts that Bitcoin could trade between $90,000 and $255,000 by the end of 2026, maintaining a bullish outlook.