US Treasury Highlights “Digital Gold” Bitcoin’s Rapid Growth In Latest Report
The US Treasury highlighted Bitcoin’s “rapid growth” in its latest report while discussing the flagship crypto’s use case, especially in decentralized finance (DeFi). Interestingly, the government department also acknowledged BTC as “digital gold.”
US Treasury Highlights Bitcoin’s Rapid Growth
In its 2024 Q4 report, the US Treasury stated that Bitcoin and other digital assets have rapidly grown from a small base. According to the US Department, the primary use case for BTC, which they also referred to as “digital gold,” seems to be a store of value in the DeFi world.
Like the US Treasury, Fed Chair Jerome Powell also recently likened Bitcoin to gold as he compared both assets. Jerome Powell said that BTC is a speculative asset that has a closer correlation to gold than the US dollar.
Meanwhile, the US department said that speculative interest seems to have played a prominent role in the growth of Bitcoin and other digital tokens thus far. Whatever it might be, BTC has undoubtedly witnessed massive growth.
In 2015, the flagship crypto had a market cap of $6.4 million. In 2019, it grew to $194 billion. Now, Bitcoin boasts a market cap of $2.3 trillion. The Bitcoin price isn’t showing signs of stopping anytime soon, as it recently crossed the $100,000 milestone.
Bitcoin’s success is already driving institutional FOMO as more companies are looking to adopt the flagship crypto as an asset on their balance sheet. Recently, manufacturer Worksport announced that it would adopt Bitcoin and XRP for its corporate treasury.
Stablecoins Are Also In Focus
The US Treasury report also highlighted stablecoins as another category of digital assets that have witnessed rapid growth. The report stated that stablecoin growth has resulted in a modest increase in demand for short-dated treasuries.
Fiat-backed stablecoins are said to have a significant portion of their collateral in the form of treasury bills and treasury-backed repo transactions. The US Treasury estimates that $120 billion in total stablecoin collateral is directly invested in Treasuries.
Over the near term, the US department expects continued growth in stablecoin markets along with the overall size of the digital asset market. They also predict that the rapid growth of Bitcoin and other digital assets and massive volatility might lead to future hedging needs and fight-to-quality demand for Treasuries.
The post US Treasury Highlights “Digital Gold” Bitcoin’s Rapid Growth In Latest Report appeared first on CoinGape.
Filed under: News - @ December 7, 2024 4:25 pm