The United States Treasury recently emphasized the rapid expansion of Bitcoin in recent years, referring to it as “digital gold.”
While discussing the use case of the flagship crypto, particularly in decentralized finance (DeFi), the US Treasury emphasized Bitcoin’s “rapid growth” in its most recent report. It is intriguing that the government department also recognized BTC as “digital gold.”
The United States Treasury underscores the rapid growth of Bitcoin
The US Treasury reported in its 2024 Q4 report that Bitcoin and other digital assets have experienced rapid growth from a modest foundation. The primary use case for BTC, which the US Department also referred to as “digital gold,” appears to be a store of value in the DeFi world, according to the department.
Fed Chair Jerome Powell, in a recent statement, also compared Bitcoin to gold, much like the US Treasury. According to Jerome Powell, Bitcoin (BTC) is a speculative asset more closely correlated with gold than the US dollar.
In the interim, the United States Department of Commerce asserted that Bitcoin and other digital tokens have experienced substantial growth primarily due to speculative interest. BTC has undoubtedly experienced significant growth, regardless of its nature.
The flagship cryptocurrency’s market capitalization was $6.4 million in 2015. It increased to $194 billion in 2019. Currently, Bitcoin has a market capitalization of $2.3 trillion. Bitcoin has recently surpassed the $100,000 threshold, and there are no indications that it will slow down shortly.
Institutional FOMO is already being stimulated by the success of Bitcoin, as an increasing number of companies are considering the flagship crypto as an asset on their balance sheet. Worksport, a manufacturer, recently disclosed its intention to implement Bitcoin and XRP in its corporate treasury.
Stablecoins are also being examined
Stablecoins were also identified as an additional digital asset category that has experienced rapid growth in the US Treasury report. The report indicated that the demand for short-dated treasuries has increased modestly due to stablecoin growth.
Treasury bills and treasury-backed repo transactions constitute a substantial portion of the collateral for fiat-backed stablecoins. The US Treasury anticipates that $120 billion in stablecoin collateral will be directly invested in treasuries.
The US department anticipates that the stablecoin markets will continue to expand in the near term, in addition to the overall size of the digital asset market. They also expect that the future hedging needs and fight-to-quality demand for Treasuries may result from the massive volatility and rapid growth of Bitcoin and other digital assets.
