Hedge fund manager James Lavish has declared that the "debasement trade" has officially entered the mainstream, with financial institutions increasingly turning to Bitcoin (BTC) as a hedge against currency devaluation. Lavish emphasized that concerns over rising debt levels, inflation, and global economic instability are driving this shift, as central banks continue to print money, eroding the value of fiat currencies.
In an interview with Cointelegraph, Lavish explained that Bitcoin's fixed supply of 21 million coins and decentralized nature make it an attractive alternative to traditional assets. He noted that institutions are no longer viewing Bitcoin as a speculative tool but as a strategic reserve and insurance policy against policies that could diminish cash holdings. This transition is underscored by major financial entities, including hedge funds and asset managers, adding Bitcoin to their balance sheets over the past year.
Lavish traced the root of the issue to the post-1971 fiat era, when the U.S. abandoned the gold standard, leading to an explosion in money supply and structural inflation. He highlighted that even credit agencies and banks are recognizing this trend, citing how Microsoft now has a better credit rating than the U.S. government. Despite short-term volatility risks, Lavish expects Bitcoin to recover more robustly than traditional assets, with institutional adoption still in its early stages, potentially amplifying its market value as trillions in capital seek protection.
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