Grayscale Report: Bitcoin Shifts Toward Inflation Hedge, Zcash May Benefit

According to the latest report by Zach Pandl, Head of Research at Grayscale, as the U.S. federal debt surpasses $40 trillion, Bitcoin’s 90-day correlation with the Nasdaq 100 has declined from over 60% to approximately 33%, while its correlation with gold has risen from near zero at the start of the year to over 50%, indicating that Bitcoin is transitioning from a high-beta risk asset to an inflation-resistant store of value. Grayscale believes that ongoing fiscal deficits and rising long-term interest rates will drive investors toward scarce alternative assets, with Bitcoin, Ethereum, and Zcash expected to be primary beneficiaries. Among these, Zcash is seen as having the potential to challenge Bitcoin’s network effects due to its financial privacy, resistance to quantum computing attacks, and cross-chain interoperability—despite its current market capitalization being less than 1% of Bitcoin’s. Additionally, Grayscale notes that the current Bitcoin bear market has lasted approximately 10 months, nearing the historical average bear market cycle of 11–12 months, and with the macro environment becoming more favorable, current price levels may present an attractive entry point for long-term investors.