Market Pulse: Grayscale Names 3 Cryptos That Could Gain From Surging US Debt

According to recent market coverage, debt growth could weaken confidence in fiat currencies and increase demand for alternative stores of value.

The crypto asset manager identifies bitcoin, ethereum, and zcash as potential beneficiaries of the debasement trade.

Government debt could strengthen demand for BTC, ETH, and ZEC, according to an Aug.

26 analysis by Grayscale Head of Research Zach Pandl.

“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,” he wrote, adding: “In digital assets we think the so-called ‘debasement trade’ will primarily benefit bitcoin, ethereum, and zcash.” Bitcoin presents the most established scarcity argument among the three assets through its programmed maximum supply of 21 million coins and lack of a government issuer.

However, bitcoin’s store-of-value role remains debated due to its volatility, limited history compared with gold, custody risks, and sensitivity to broader financial conditions.

Ethereum provides a decentralized settlement network, while Zcash combines a Bitcoin-like design with optional privacy features.

Pressure in the government bond sector prompted the Treasury to announce on Aug.