Grayscale: Currency Debasement Trade to Benefit Bitcoin as Dollar Hits 3-Month Low

Asset manager Grayscale's crypto research team said in a research report that the so-called "currency debasement trade" is benefiting Bitcoin. Grayscale's head of research, Zach Pandl, noted in the report that uncontrolled growth in government debt is undermining the credibility of fiat currencies, prompting investors to seek alternative stores of value such as physical gold and certain cryptocurrencies, with Bitcoin set to be a primary beneficiary. The report stated that U.S. public debt has surpassed $40 trillion, and while the Treasury's bond buybacks have eased rising borrowing costs, the core deficit remains. Grayscale believes this could drive investors toward the debasement trade, involving Bitcoin, Ethereum, and Zcash. The report also noted that the buybacks themselves are telling — the heavy burden of government debt is pushing borrowing costs higher, and the Treasury is merely treating the symptoms (rising bond yields) rather than curing the structural deficit. As Bitcoin began to surge last week, the dollar experienced its worst week in August and fell to a three-month low. As of Friday afternoon in New York, Bitcoin was trading at approximately $77,493, having touched a high of $81,281 during the week; it was roughly flat over the past 24 hours but up more than 20% over the past 30 days.