Bitcoin Surges 100% to $93,000 as Institutions Hedge Against Inflation

Bitcoin's recent rally, which has seen its price surge to as high as $94,000, is primarily being driven by institutional investors, according to crypto exchange Coinbase Global. This surge in price has been attributed to the accumulation of Bitcoin by institutional investors and sovereign wealth funds, who have been increasing their holdings in recent weeks.

John D’Agostino, the Head of Strategy at Coinbase Global, highlighted that retail investors have largely remained on the sidelines when it comes to cryptocurrencies. He noted that while institutional investors are actively accumulating Bitcoin, retail investors are pulling money out of both spot Bitcoin and Ethereum exchange-traded funds (ETFs).

According to D’Agostino, the theory at Coinbase is that de-dollarization is a significant factor driving institutional investors back into cryptocurrencies. Sovereign wealth funds and institutions are reducing their exposure to the U.S. dollar and turning to crypto as a hedge against inflation. This shift is also evident in the decoupling of Bitcoin and other cryptocurrencies from technology stocks, which they once traded in tandem with, such as chipmaker Nvidia.

D’Agostino further explained that a growing number of institutions are beginning to accept that Bitcoin might serve as a hedge against inflation. This perspective is leading them to buy the digital asset for future downside protection. He compared Bitcoin's characteristics to gold, stating that it is trading on its core characteristics similar to the precious metal.

The current price of Bitcoin is trading at $93,000, reflecting the significant influence of institutional investors in the market. This trend underscores the growing acceptance of Bitcoin as a viable investment option among institutional players, who are increasingly viewing it as a store of value and a hedge against economic uncertainties.