Debasement Trade Is Here Thanks to Government Debt - And Bitcoin Will Benefit: Grayscale

Bitcoin Magazine

Debasement Trade Is Here Thanks to Government Debt — And Bitcoin Will Benefit: Grayscale

The debasement trade is back — and will benefit bitcoin.

That’s according to asset manager Grayscale’s crypto research team, who wrote in a note this week that the U.S. government debasing its currency would lead to cash hitting digital assets.

“Unchecked government debt growth undermines the credibility of fiat currencies and drives investors to seek out alternative stores of value like physical gold and certain cryptocurrencies,” the note by the firm’s head of research, Zach Pandl, read, adding that primarily bitcoin would benefit.

The so-called debasement trade is when investors buy an asset as a way to hedge against a currency losing value. The trade was hot last year, and helped bitcoin’s run, but the digital asset’s run lost steam after October as traders turned their attention to stocks related to artificial intelligence.

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