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Grayscale links rising U.S. debt to a bitcoin debasement trade
Grayscale says the U.S. public debt topping $40 trillion and Treasury liquidity buybacks have coincided with a shift toward non-yielding assets like bitcoin, Ethereum, and Zcash.
Grayscale research argues that growing U.S. government debt is eroding confidence in fiat currencies and helping fuel what it calls the debasement trade, a strategy aimed at hedging against currency value loss.
According to Bitcoin Magazine, Grayscale said unchecked debt growth undermines fiat credibility and drives investors toward alternative stores of value such as physical gold and certain cryptocurrencies, with bitcoin expected to benefit most.
The note also points to Treasury actions, including bond buybacks meant to ease borrowing costs, and to the Treasury statement that U.S. public debt exceeded $40 trillion for the first time.
Bitcoin Magazine added that Grayscale cited the timing of recent liquidity-support buyback operations, saying dollar weakness and increased demand for non-yielding assets supported the move, naming bitcoin, Ethereum, and Zcash as potential beneficiaries.
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