Gray Scale: Currency depreciation trades will benefit Bitcoin, as the dollar falls to a three-month low

The asset management company Grayscale's crypto research team stated in a report that the so-called "debasement trade" is favorable for Bitcoin. The head of research at the institution, Zach Pandl, pointed out in the report that uncontrolled government debt growth undermines the credibility of fiat currencies, prompting investors to seek alternative stores of value such as physical gold and certain cryptocurrencies, with Bitcoin being the primary beneficiary.

The report states that U.S. public debt has surpassed $40 trillion, and the Treasury is conducting bond buybacks to alleviate rising borrowing costs, but the core deficit still exists. Grayscale believes this may drive investors towards debasement trades involving Bitcoin, Ethereum, and Zcash. The report also notes that the buybacks themselves indicate a problem—the heavy growth of government debt is driving up borrowing costs, and the Treasury is merely treating the symptoms (rising bond yields) without addressing the root cause of 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 New York time, Bitcoin was trading at approximately $77,493, having reached a high of $81,281 earlier in the week; it has remained relatively flat over the past 24 hours but has risen over 20% in the past 30 days.