Yields on 10-year and 30-year U.S. Treasury bonds have been slowly rising, reflecting the increased risk of owning them. The Dow Jones Industrial Average and Bitcoin have both been negative over the past two weeks, although other uncertainties in the market make it difficult to directly link these moves to the debt talks. But the second phase of default-induced economic doomsday will be more complex and long-lasting. A U.S. debt default would dramatically reshape the global financial system in a way that could enhance Bitcoin's role as the global financial infrastructure. This is another example of Bitcoin’s role as a theoretical hedge against a catastrophic scenario, what is good for Bitcoin precisely because it is very bad for human society. Bitcoin's neutral currency attributes are likely to form significant support simply because it is not subject to the risk of national debt. In addition, a default on U.S. debt will first weaken international interest in holding U.S. debt. That would balloon the cost of servicing existing debt, potentially forcing the US into a brutal austerity regime. This in turn would significantly slow down the entire global economy, perhaps another downward pressure on Bitcoin. But by the same token, a U.S. default would hasten international efforts to wean itself off the dollar as a trade and investment tool. The dollar's biggest draw is its strength and stability, and a default would clearly damage that confidence.