Coinbase Executive on CNBC: National Investment Funds Purchasing Bitcoin for Their Reserves
Loosened Chains: Bitcoin Soars Above $94,000 Amid Institutional Investment Frenzy
- "Gold 2.0": Traders Hype Bitcoin's Boom
In a candid chat on CNBC's Squawk Box, John D'Agostino, the Head of Strategy at Coinbase Institutional, shed light on the recent spike in institutional buying of Bitcoin and its implications. Venture capitalist Anthony Pompliano expressed his excitement over D'Agostino's comments on large institutional players accruing Bitcoin, a trend that has been unprecedented in just a few short years.
Golden Gains: Bitcoin Reaches New Heights
Andrew Sorkin, the host, inquired about the factors driving Bitcoin's current surge. On Wednesday, BTC skyrocketed to a local daily high of $94,510, marking a 3.67% growth over the previous 24 hours and an additional 6.68% over the two preceding days, rising from $88,570.
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Regarding Bitcoin's current growth spurt, D'Agostino pointed out the decoupling of Bitcoin from the stock market, highlighting the negative and positive correlation with stock market performance. He warned that a positive correlation could flip during periods of market bloom.
D'Agostino further emphasized that the short-term growth drivers for Bitcoin may change in the near future. He also noted that a similar set of tailwinds during a different period could elicit a unique reaction from Bitcoin rather than the current bullish sentiment.
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"Gold 2.0": The New Safe Haven?
Financial institutions now anticipate stringent global trade limitations and a significant decline due to tariffs. With much trade being denominated in U.S. dollars, the demand for dollars is likely to drop, a phenomenon known as "de-dollarization."
These institutions, such as sovereign wealth funds and large insurance pools, have reportedly been investing in Bitcoin and exchanging it for fiat when necessary. However, if they perceive the dollar as weakening, they'll cease converting Bitcoin to fiat, opting instead to hoard Bitcoin as a hedge against a declining dollar.
D'Agostino also underscored that an increasing number of traders view Bitcoin as an asset that shares characteristics with gold, making it more attractive during unstable markets.
- Anthony Pompliano
- #Bitcoin
[1] https://coincenter.org/content/understanding-lightning-network[2] https://www.coinbase.com/institutional/pay[3] https://coinbase.com/institutional/services[4] https://www.theatlantic.com/technology/archive/2021/02/bitcoin-surge-explained/617992/[5] https://www.mcgill.ca/oss/files/desautels/files/bitcoin-exchange-rate-and-gold-price-causes-coinstalker.pdf
- Agostino, during a CNBC interview, stated that large institutional players are accruing Bitcoin, suggesting an unprecedented trend in recent years.
- D'Agostino also highlighted the decoupling of Bitcoin from the stock market, and warned that a positive correlation could flip during periods of market bloom.
- As a result of global trade limitations and tariffs, financial institutions are reportedly investing in Bitcoin as a hedge against a declining dollar, viewing it as an asset that shares characteristics with gold.
- With Bitcoin's surge and institutional investment, some traders are likely to explore onboarding in the cryptocurrency trading space, especially as cryptocurrencies such as Bitcoin become more mainstream.
