Grayscale says U.S. debt buybacks may lift demand for BTC, gold

Trust in fiat currencies including the U.S. dollar is likely to weaken, bringing cryptocurrencies and gold into focus as alternative stores of value, according to a recent report from crypto asset manager Grayscale. Zach Pandl, Grayscale’s head of research, said expanded U.S. Treasury buybacks of long-term government bonds are only a stopgap measure that does not address the underlying problem of structural fiscal deficits. Pandl added that U.S. public debt surpassed $40 trillion for the first time on the day the buybacks were announced, while borrowing in the private sector has also risen sharply for AI infrastructure buildouts, adding to upward pressure on interest rates. He said unchecked growth in government debt is eroding confidence in fiat currencies and increasing investor demand for alternative stores of value, with cryptocurrencies including BTC, ETH and ZEC, as well as gold, likely to benefit.