Grayscale: 'Fed's Stagflation Concerns... Positive for Bitcoin'

An analysis has emerged suggesting that the Federal Reserve's (Fed) economic perception could be a boon for Bitcoin (BTC).

Jack Pandle, head of research at the U.S. asset management firm Grayscale, stated on the 8th via X, "The Fed is concerned about stagflation (rising prices amid economic stagnation)," and "I believe this will ultimately be positive for Bitcoin."

Previously, Jerome Powell, the Fed Chair, decided to hold interest rates steady on the 7th (local time) and said, "The uncertainty about the economic path is very high, and downside risks have increased." In this regard, Bloomberg reported, "The Fed warns of stagflation, where economic growth slows and inflation rises."

Grayscale believes that stagflation could drive the upward trend in Bitcoin prices. In a report last month, Grayscale stated, "Tariff increases exacerbate stagflation, which tends to positively impact scarce commodities like gold," and "Bitcoin did not exist during past stagflation periods but can be considered a highly scarce digital commodity." They further analyzed, "(Bitcoin) is increasingly being recognized as a modern store of value," and "Trade tensions could pressure the demand for the U.S. dollar as a reserve currency, expanding investment opportunities in competing assets like gold and Bitcoin."