Bitcoin's Scarcity Drives Institutional Demand, Says Coinbase Executive
1min read Coinbase's Head of Institutional Strategy, John D’Agostino, has highlighted scarcity as a key driver behind the surge in demand for Bitcoin (BTC) from institutional investors. In a recent interview, D’Agostino identified four primary reasons for the increasing interest in BTC exchange-traded funds (ETFs).
According to D’Agostino, the first three reasons are that BTC is no longer trading as a tech bundle, its role as an inflation hedge, and the "catch up to gold" type trade. The fourth reason, he noted, is the scarcity of Bitcoin. D’Agostino explained that Bitcoin miners cannot produce the cryptocurrency fast enough to meet the overwhelming demand, making it inappropriate to view BTC as a tech stock. He suggested that viewing Bitcoin as a commodity similar to gold could be a useful framework, especially in relation to the gold trade.
D’Agostino also emphasized an often-overlooked aspect of the ETF inflows. He pointed out that asset managers have not been allowing their salespeople or financial advisors to recommend BTC ETFs. This restriction is unusual, as it is akin to a shoe salesman not being able to recommend a specific brand. D’Agostino speculated that this situation will change in the future, and when it does, the impact on the market could be significant. He left it to the viewers to consider what might happen when brokers are finally able to recommend these ETFs to their clients.
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