First, your scenario can't avoid a technical default, since he already *has* technically defaulted.
Agreed. Pirate actually defaulted on Monday.
But in the terms of his bet with Vandroiy he has two weeks grace. And in the terms of Matthew's bet he has three weeks grace.
In your scenario, Pirate winds up with about 50,000 BTC. In mine, he winds up with 325,000 BTC.
Agreed. If pirate's aim is to end up with as many BTC as possible, your scenario makes sense. But if his aim is to end up with a substantial profit, yet still be able to claim to have repaid all the loans, my scenario could do it (at the extremes of possibility, admittedly).