- Grayscale suggests inflation and trade tensions could drive demand for scarce assets like Bitcoin and gold.
- New ETF filings and policy shifts indicate growing institutional interest in crypto assets.
As inflationary pressures and trade tensions resurface, Grayscale Research sees an interesting opportunity in this condition. In their latest report, they compare Bitcoin’s situation today to gold in the 1970s: both are rare and increasingly sought after as the value of money is eroded by inflation.
At a time when people are starting to doubt the durability of traditional currencies, assets like Bitcoin and gold have the potential to be a reasonable escape.
Bitcoin and Gold: Escape Amid Uncertainty
Imagine if you live in a time when inflation is skyrocketing, the price of basic necessities is rising, and every savings feels increasingly thin in value. In conditions like that, who wouldn’t be tempted to save an asset that can’t be printed at will? Grayscale said that the current Bitcoin market structure is undergoing rapid improvement.
One of the reasons is thanks to changes in policy in the United States which are starting to be more open to digital assets. In terms of regulation, recent government steps have also paved the way for institutional investment in crypto.
Furthermore, CNF reports that Grayscale has applied to the SEC to launch an Avalanche-based spot ETF on the Nasdaq. Interestingly, VanEck also took similar steps, indicating that institutional interest in Avalanche is growing.
This seems to emphasize that crypto assets that were once considered “young people’s toys” are now slowly transforming into part of a more established portfolio.
Grayscale’s Product Expansion and Strategic Steps
Grayscale is also getting more aggressive. On April 2, they introduced two new Bitcoin ETF products, namely the Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI).
These two products not only focus on value appreciation, but are designed to generate income through options strategies. For investors who want their crypto portfolio to not only sit back but also work, this is an interesting option.
The Solana ETF is not left behind. Grayscale filed a Solana-based ETF on April 4. Solana itself is known as a network that has high transaction speeds and low fees, making it a strong candidate as an alternative to Bitcoin. This could be Grayscale’s strategic move to reach a wider market.
On the other hand, Grayscale has just closed the long chapter of its legal dispute with Osprey Funds. After two years of fighting over Bitcoin ETF promotion, the two companies finally agreed to a settlement on April 11.
Osprey had accused Grayscale of misleadingly promoting the conversion of Grayscale Bitcoin Trust (GBTC) to a spot ETF. However, after the SEC approved the conversion in January 2024, the two parties reached a settlement and Osprey withdrew its appeal.
Today’s Bitcoin market is indeed not the same market as it was a decade ago. Institutional support is getting stronger, infrastructure is getting more mature, and regulations are starting to catch up.
