Grayscale Says Bitcoin (BTC) Set to Gain as US Debt Tops $40 Trillion

Grayscale's Debasement Trade Call

Bitcoin (BTC) has a powerful macro tailwind building behind it if the latest research from asset manager Grayscale is right. In a note published this week, the firm's head of research Zach Pandl argues that unchecked growth in US government debt is eroding the credibility of fiat money and steering investors toward alternative stores of value — gold first among them, but above all the original scarce digital asset, Bitcoin. The firm distilled the argument in its official X post, noting that US public debt has climbed past $40 trillion and that the Treasury is buying back bonds to ease rising borrowing costs even as the structural deficit remains intact. Grayscale Research expects that dynamic to channel capital into the debasement trade — Bitcoin, Ethereum and Zcash. The mechanism, as Pandl frames it, is uncomfortable for Washington: buybacks treat the symptom, since heavy debt issuance is what drives borrowing costs up in the first place, and the government's realistic options — higher taxes, spending cuts, or yet more debt — all point toward a larger dollar supply. The debasement trade, briefly, is the practice of buying scarce assets as a hedge against a currency losing purchasing power — a playbook that fueled much of Bitcoin's advance last year before momentum faded after October, when traders rotated into artificial-intelligence equities. Markets have started pricing some of this in again. The Treasury's announcement last week that it would at least double its liquidity-support buyback operations landed on the same day the national debt crossed the $40 trillion threshold for the first time, and the dollar subsequently posted its worst week of August, touching a three-month low. Bitcoin surged on the news, printing a weekly high of $81,281 before settling around $77,493 in Friday afternoon New York trading — flat over 24 hours but up more than 20% across the past 30 days.

official X posthttps://x.com/Grayscale/status/2093358354169299379?ref_src=twsrc%5Etfw

$1.65 Billion Weekly Fund Inflows

Capital flows are validating the thesis in real time. Data from the Aug. 27 weekly market report published by asset manager CoinShares shows roughly $1.65 billion in net inflows to global digital asset investment products over the first three trading days of this week — following the prior week's $2.94 billion, the largest single-week haul of the year so far. Bitcoin products absorbed about $976 million of the new money and Ethereum products about $478 million, lifting assets under management across global crypto ETPs to roughly $155 billion and pushing year-to-date flows back into net-positive territory at around $3.4 billion. CoinShares' macro read closely echoes the debasement framing: sticky US inflation and softening demand have boxed the Federal Reserve into a dilemma, while the Treasury's bond buybacks and its shortening of issuance maturities could add further inflation pressure. The report's mining section adds a supply-side twist — America's crypto mining sector is emerging as an accidental winner of the energy buildout, because the queue of US data centers waiting for grid interconnection has swelled to roughly 2,060 GW and new projects now average close to five years to connect. Miners securing the Proof of Work network hold ready-made power infrastructure and are increasingly monetizing that capacity for AI computing; CoinShares expects AI-related revenue to climb from about 30% of miner revenue to roughly 70% by year-end. One caveat for bulls: the momentum flipped in Thursday's session, when US spot ETF vehicles logged a $201.8M outflow — a reminder that institutional demand is not moving in a straight line. Readers tracking the market in real time can follow live spot and futures prices on Bitget.

Gold Correlation Above 50%

Our read: the two stories are one story. The research note we opened with and the fund-flow data behind it both describe the same repricing — of Bitcoin from a leveraged Nasdaq proxy into a monetary hedge. Supporting figures in the research materials show Bitcoin's 90-day correlation with the Nasdaq 100 has fallen from above 60% to roughly 33%, while its correlation with gold has climbed from near zero at the start of the year to over 50%. For holders with a long-term HODL approach, that shift restores the asset's original diversification promise; for allocators, it makes a small strategic sleeve easier to defend. We track these flows daily on our Bitcoin topic hub.