{"id":8289,"date":"2026-08-28T21:16:13","date_gmt":"2026-08-28T21:16:13","guid":{"rendered":"https:\/\/digkrypton.com\/index.php\/2026\/08\/28\/debasement-trade-is-here-thanks-to-government-debt-and-bitcoin-will-benefit-grayscale\/"},"modified":"2026-08-28T21:16:13","modified_gmt":"2026-08-28T21:16:13","slug":"debasement-trade-is-here-thanks-to-government-debt-and-bitcoin-will-benefit-grayscale","status":"publish","type":"post","link":"https:\/\/digkrypton.com\/index.php\/2026\/08\/28\/debasement-trade-is-here-thanks-to-government-debt-and-bitcoin-will-benefit-grayscale\/","title":{"rendered":"Debasement Trade Is Here Thanks to Government Debt \u2014 And Bitcoin Will Benefit: Grayscale"},"content":{"rendered":"

Bitcoin Magazine<\/a><\/p>\n

Debasement Trade Is Here Thanks to Government Debt \u2014 And Bitcoin Will Benefit: Grayscale<\/a><\/p>\n

<\/div>\n

The debasement trade is back \u2014 and will benefit bitcoin.\u00a0<\/p>\n

That\u2019s according to asset manager Grayscale\u2019s 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.\u00a0<\/p>\n

\u201cUnchecked 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,\u201d the note by the firm\u2019s head of research, Zach Pandl, read, adding that primarily bitcoin would benefit.\u00a0<\/p>\n

\n

US public debt has reached over $40 trillion. The Treasury is buying back bonds to ease rising borrowing costs, but core deficit remains. <\/p>\n

Grayscale Research believes this may drive investors towards the debasement trade: Bitcoin $BTC<\/a>, Ethereum $ETH<\/a>, and Zcash $ZEC<\/a>.<\/p>\n

Read more\u2026 pic.twitter.com\/tN3xgaNZ1l<\/a><\/p>\n

\u2014 Grayscale (@Grayscale) August 28, 2026<\/a>\n<\/p><\/div>\n

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\u2019s run, but the digital asset\u2019s run lost steam after October as traders turned their attention to stocks related to artificial intelligence.\u00a0<\/p>\n

But since last week, bitcoin has benefited from news<\/a> that the U.S. Treasury would at least double the size of its liquidity-support buyback operations. The announcement last week hurt the dollar but non-yielding assets have benefited.\u00a0<\/p>\n

\u201cThat buybacks are needed at all is the problem: heavy growth in government debt is driving up the cost of borrowing,\u201d the note continued. \u201cThe Treasury is treating the symptoms (rising bond yields) because they cannot cure the disease (structural deficits).\u201d\u00a0<\/p>\n

The note added that on the same day last week as the buyback announcement, the Treasury also said the U.S. public debt exceeded $40 trillion for the first time.<\/p>\n

As debt and interest payments grow, the government needs to either raise taxes, cut spending, or issue more debt.\u00a0<\/p>\n

Bitcoiners see the more politically likely path as expanding the dollar supply \u2014 which is ultimately bad for the dollar, and good for scarce assets like bitcoin.\u00a0<\/p>\n

After bitcoin started surging last week, the dollar had its worst week of August and was trading at a three-month low<\/a>.\u00a0<\/p>\n

Bitcoin was trading<\/a> for $77,493 on Friday afternoon in New York after hitting a high this week of $81,281. Over a 24-hour period, the coin now sits unmoved, but over a 30-day period, it has jumped by more than 20%.\u00a0<\/p>\n

This post Debasement Trade Is Here Thanks to Government Debt \u2014 And Bitcoin Will Benefit: Grayscale<\/a> first appeared on Bitcoin Magazine<\/a> and is written by Mathew Di Salvo<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine Debasement Trade Is Here Thanks to Government Debt \u2014 And Bitcoin Will Benefit: Grayscale The debasement trade is back \u2014 and will benefit bitcoin.\u00a0 That\u2019s according to asset manager Grayscale\u2019s crypto research team, who wrote in a note this week that the U.S. government debasing its currency would lead to cash hitting digital […]<\/p>\n","protected":false},"author":0,"featured_media":8290,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-8289","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bitcoin"],"acf":[],"_links":{"self":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts\/8289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/comments?post=8289"}],"version-history":[{"count":0,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts\/8289\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/media\/8290"}],"wp:attachment":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/media?parent=8289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/categories?post=8289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/tags?post=8289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}