Grayscale Warns Unchecked Debt Growth May Push Investors Toward BTC, ETH, and ZEC

Grayscale, a prominent crypto fund issuer, has warned that rising U.S. debt could push investors toward alternative stores of value, including Bitcoin (BTC), Ethereum (ETH), and Zcash (ZEC). The firm's warning comes as the U.S. public debt surpassed $40 trillion for the first time, with long-term real Treasury yields climbing near 3%.

The Treasury recently announced larger buybacks of long-maturity notes and bonds in the open market, which Grayscale says addresses rising yields without resolving structural budget deficits. This policy drives continued government borrowing, further increasing debt growth.

Grayscale's research argues that unchecked debt growth can weaken the credibility of fiat currencies and spur the adoption of alternative stores of value. The firm sees a possible shift in investor behavior toward assets used as alternative stores of value, including physical gold alongside selected cryptocurrencies.