According to a Coinbase executive, institutional investors are increasingly purchasing Bitcoin (BTC) due to a significant factor.
During a recent interview with CNBC, Coinbase’s Head of Institutional Strategy, John D’Agostino, outlined four potential reasons why he believes BTC exchange-traded funds (ETFs) are on the rise.
“We discussed the three reasons why BTC ETFs are gaining traction: it is no longer considered solely a tech asset, serves as an inflation hedge, and is seen as a ‘catch up to gold’ investment. With the recent surge in ETF flows, we now have the fourth factor, which is scarcity. Bitcoin miners are unable to keep up with the overwhelming demand for Bitcoin. It is not accurate to view it solely as a tech stock or a commodity like gold. However, I prefer to analyze it in relation to the gold market. Others may have different perspectives, but I find this framework useful in understanding its value compared to gold.”
Moreover, D’Agostino points out an important aspect that many may be disregarding.
“An essential point to note about these ETF inflows, not only the recent surge but since their inception, is that they have been incredibly successful. What is often overlooked is that asset managers are not allowing their salespeople or financial advisors to recommend it. This is remarkable. It’s akin to a shoe salesman being unable to suggest Nike. This dynamic is likely to change in the future. I’ll leave it to your audience to speculate on the impact when the floodgates open for brokers to recommend this ETF.”
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