A top Coinbase executive says that there is one big reason to remain bullish on Bitcoin (BTC).
In a new interview on CNBC Squawk Box, John D’Agostino, Coinbase’s head of institutional strategy, says that Bitcoin is performing well as a hedge against inflation and will become even more attractive to investors as the Fed continues to cut rates.
“We’ve seen, year-to-date, gold doing really well, up 46% or so. Bitcoin doing well, up about 21%. Ethereum up about 25%… But push back year-on-year, gold’s up about 44%, Bitcoin is up 75%, Ethereum is up 58%. And even if you look at something like the COIN50 index, a basket of crypto, that’s up about 72% year-on-year. Now, if you go back 3,5,7, years, there’s no question which is the better asset to own…
You don’t have to choose [between assets]. This isn’t a ‘who’s the goat, Jordan or LeBron?’ conversation. Bitcoin has characteristics gold doesn’t. It’s programmable. It’s digital. It’s infinitely scalable in terms of movement… Most importantly, I would argue, it produces yield where gold has a negative cost of carry. If you’re one of the people who are genuinely concerned that global money supply grows like 7%-8% a year, if you believe that’s excessive and that’s causing inflation, then you need assets that will beat that.”
D’Agostino predicts that as money market funds start to earn fewer returns for investors as the Federal fund rate declines, they will reallocate a portion of those investments into Bitcoin.
“A couple trillion dollars is sitting in money markets because at 5%, 4.5%, 5.5% that’s nice. You’re getting close to beating your target inflation rate. As rates tick down, that unlocks those assets. Now, all of it’s not flowing into assets like Bitcoin, but a portion will. That’s what makes us bullish.”
Bitcoin is trading for $118,627 at time of writing, up 4.1% on the day. Meanwhile, Ethereum (ETH) is trading for $4,340 at time of writing, up 5.1% on the day.
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