Grayscale Says Debasement Trade Is Benefiting Bitcoin

Grayscale's crypto research team said the so-called debasement trade is benefiting Bitcoin, with research head Zach Pandl arguing that unchecked government debt growth is weakening confidence in fiat currencies and driving investors toward alternative stores of value such as gold and some cryptocurrencies. According to ChainCatcher, the report said Bitcoin stands to benefit the most. The report said U.S. public debt has surpassed $40 trillion, while the Treasury is conducting bond buybacks to ease rising borrowing costs even as the core deficit remains. Grayscale said this could push investors toward debasement trades involving Bitcoin, Ethereum, and Zcash, and argued that the buybacks show government debt growth is raising borrowing costs while only treating the symptom of higher bond yields rather than the structural deficit. The report also noted that Bitcoin began surging last week as the dollar posted its worst week in August and fell to a three-month low. As of Friday afternoon in New York, Bitcoin was trading around $77,493, after briefly reaching $81,281 on Monday; it was little changed over the past 24 hours but had gained more than 20% over the past 30 days.