Deep Tide TechFlow update: On August 28, according to the latest report released by Zach Pandl, Head of Research at Grayscale, as U.S. federal debt has surpassed $40 trillion, the 90-day correlation between Bitcoin and the Nasdaq 100 has fallen from over 60% to around 33%, while the correlation with gold has risen from nearly 0 at the start of the year to more than 50%. This indicates that Bitcoin is shifting from a high-beta risk asset to an inflation-hedging store-of-value asset.

Grayscale believes that the continued expansion of the fiscal deficit and the rise in long-term interest rates will push investors to shift toward scarce alternative assets. Bitcoin, Ethereum, and Zcash are expected to be among the main beneficiaries. Among them, Zcash is thought to have the potential to challenge Bitcoin’s network effects thanks to features such as financial privacy, resistance to quantum computing attacks, and cross-chain interoperability, even though its market capitalization is currently still less than 1% of Bitcoin’s.

In addition, Grayscale noted that the current Bitcoin bear market has lasted about 10 months, approaching the average duration of past bear markets (11–12 months). Coupled with a macro environment that is becoming more friendly, it believes that current prices may be a favorable entry point for long-term investors.