Coinbase Institutional Strategy Head John D’Agostino Reports Increased Bitcoin Investments
Coinbase Institutional Strategy Head John D’Agostino recently stated that large institutional investors, including sovereign wealth funds and major insurance pools, continued to increase their investments in Bitcoin (BTC) throughout April.
(Background: A new crypto giant is born! Tether, SoftBank, and Bitfinex jointly establish “21 Capital” with $3 billion: fully buying Bitcoin to replicate MicroStrategy’s success)
(Context: Is a significant breakthrough for Bitcoin on the horizon? How do various institutions and KOLs view the market outlook)
Three Main Reasons for Institutional Inflow into Bitcoin
D’Agostino emphasized that these traditionally conservative asset allocators are gradually embracing Bitcoin as the global monetary environment rapidly evolves, incorporating it into broader investment strategies.
D’Agostino pointed out that the inflow of institutional funds into Bitcoin in April was primarily driven by three interrelated factors:
1. De-dollarization and Portfolio Adjustment
Firstly, the comprehensive tariff policy implemented by U.S. President Trump at the beginning of this month has prompted global asset allocators to reassess the durability of the dollar as the primary reserve currency. D’Agostino noted that some sovereign wealth funds are reevaluating their allocation strategies for dollars, gold, and other reserve assets, opting to purchase Bitcoin directly with their local currencies to increase their holdings.
He added that these institutions anticipate a contraction in dollar-denominated global trade and a slowdown in U.S. economic growth, making them more willing to view Bitcoin as a non-sovereign store of value to hedge against risks arising from declining demand for U.S. assets.
2. Retail Outflows and Institutional Inflows
Additionally, although Bitcoin exchange-traded funds (ETFs) experienced net outflows for most of April, there was a net inflow of $1.3 billion in Bitcoin spot ETFs from April 21 to 22.
D’Agostino explained that Coinbase observed continuous net buying behavior from long-term capital allocators, particularly sovereign wealth funds and insurance companies, whose direct purchases remained undeterred by market volatility.
He stressed that ETF fund flows do not fully reflect the trends of institutional investors since sovereign buyers typically do not publicly disclose their holdings. Furthermore, long-term holders have also been purchasing spot Bitcoin during market downturns, which may explain why Bitcoin prices have decoupled from ETF fund outflows.
3. Inflation Hedge and Alternative to Gold
Finally, D’Agostino stated that institutional investors are increasingly viewing Bitcoin as an inflation hedge. The core attributes of Bitcoin, such as its fixed supply, immutability, non-sovereign control, and portability, have renewed its investment appeal.
He mentioned that Bitcoin often ranks alongside gold and real estate among the top five assets in global macro traders’ multi-year inflation hedge models. As Bitcoin gradually detaches from its connection with leveraged tech trading, its role as an alternative to gold is becoming more pronounced, thereby attracting more long-term capital inflow.
Bitcoin Price Trends and Market Connections
It is also noteworthy that Bitcoin’s current correlation with the U.S. stock market is weakening. In the past, Bitcoin prices were often highly correlated with U.S. tech stocks, but as its inflation hedge properties gain recognition, its price fluctuations are gradually decoupling from U.S. stock indices (such as the S&P 500).
Conversely, the connection between Bitcoin and gold is gradually strengthening, with both seen as hedging assets against currency devaluation and geopolitical uncertainty. D’Agostino believes that Bitcoin’s unique position as a non-sovereign asset is making its role in institutional portfolios increasingly similar to that of gold.
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