PANews, June 23 – Grayscale Head of Research Zach Pandl stated in a post that since the outbreak of the Iran conflict in late February, U.S. stocks have risen 9%, Bitcoin has fallen 1%, and gold has dropped 20%. AI spending has supported stock market performance, while Bitcoin and gold have underperformed partly due to market expectations that the Federal Reserve may raise interest rates to curb inflation. Over the past year, Fed rate expectations have risen by approximately 60 basis points, about half of Fed officials believe a rate hike could be appropriate in 2026, and the European Central Bank has already taken the lead in hiking rates. As non-yielding monetary assets, gold and Bitcoin compete with fiat currencies, and rising interest rates increase the opportunity cost of holding Bitcoin and gold, thereby dampening demand.

However, Grayscale believes the Fed will not raise rates. If this judgment is correct, Bitcoin’s price could catch up with stock market performance. Zach Pandl noted that Bitcoin serves two functions in a portfolio: as a long-term store of value as a scarce digital commodity, and as a public blockchain providing exposure to the long-term growth of the crypto industry. Its functions are similar to, but not identical to, those of gold and growth stocks, and it can serve as a portfolio diversification tool with an attractive current price.