U.S. Debt Crisis May Drive Investors Towards BTC, ETH, and ZEC
Grayscale, a well-known crypto fund issuer, has warned that the rising U.S. debt could push investors towards Bitcoin (BTC), Ethereum (ETH), and Zcash (ZEC). The warning follows the announcement by the U.S. Treasury that it will be purchasing $4 billion in long-maturity notes and bonds to reduce the risk-adjusted supply of Treasury debt.
The firm stated that unchecked government borrowing can weaken credibility in fiat currencies and increase demand for alternative stores of value, including cryptocurrencies.
According to Grayscale, this 'debasement trade' is a response to higher borrowing costs rather than a solution to structural deficits. The company warned that continued debt growth may push investors towards assets used as alternative stores of value.