A top Coinbase executive says that investors who missed out on gold's massive rally may start flooding into Bitcoin (BTC).
Coinbase executives are warning that as investors begin to get interested in Bitcoin (BTC), they may begin to rotate out of their favorite asset classes.
In an interview on CNBC Squawk Box, John D’Agostino, Coinbase’s head of institutional strategy, says that investors are still focused on gold. However, he notes that several traders are now looking for a Bitcoin contribution to the portfolio as a final leg of the “de-dollarization” trade.
“I spoke to a couple of traders who said if you believe these conditions, these de-dollarization conditions are going to persist, you’re looking at gold obviously first and foremost. But maybe you missed out on that trade. You’re looking at that rally and saying I missed the boat on that. So what other assets could participate in that market panic long-term inflation hedge?
When you do the work, there’s a very short list of assets that mirror the characteristics of gold. Bitcoin is on that short list. In addition to the four characteristics I mentioned [scarcity, immutability, non-sovereign asset, portability], it’s mining scarcity, it’s mining difficulty gets harder over time.”
He adds that investor analysis shows Bitcoin is a top-performing asset during market turmoil and inflationary conditions.
“I know a couple of the best commodity traders in the world, and five, six years ago they thought inflation was going to persist and be an issue. And there’s no perfect inflation hedge. We all know that. Because nothing’s perfect. So they created a basket. So they looked at hundreds of different assets and said what’s the best possible basket of commodities, real estate holdings, US Treasuries, what does that look like over the next 10 years to be the better inflation hedge just holding a single asset. In every single one of their analysis, Bitcoin was top five. So, again, nothing’s perfect, but as a basket for to protect against market panic and inflation hedge Bitcoin and gold go side-by-side.”
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