Institutions that bought Bitcoin at $100,000 and $125,000 are showing greater interest now that the price has fallen to around $60,000, according to John D’Agostino, head of institutional strategy at Coinbase.
He said this in a recent interview with CNBC, with Bitcoin trading around $63,500 after last week’s plunge.
There are no signs of panic selling among large players
D’Agostino said he was not aware of any major institutional investors facing dangerous levels of leverage or imminent liquidation. Many large holders are reportedly looking to raise additional capital and expand their Bitcoin positions instead of reducing their exposure.
D’Agostino said Middle Eastern family offices, sovereign wealth funds and government investment vehicles were among those seeing the recent correction as an opportunity to buy at lower prices.
He pointed out that institutions have spent years studying Bitcoin and tend to become more interested as the price falls.
The background to all of this is the Bitcoin market, which has fallen sharply over the past week. The asset fell to around $59,500 after trading above $70,000 just a few days ago before recovering to above $63,000.
ETF exposure remains despite decline
Despite the sharp decline, investors maintained more than $750 billion in exposure through spot Bitcoin ETFs, D’Agostino said. Retail participation declined only slightly.
“I think both retail and institutional are sending a signal that this is a long-term asset you want to hold,” he said in an interview.
CNBC host Joe Kernen raised several factors that may have contributed to the decline, including a risk-averse environment, capital rotation into other assets, rising interest rates, and slower-than-expected progress on regulatory clarity.
D’Agostino acknowledged that these concerns are widely cited by market participants, but argued that price fluctuations are normal for an asset class that behaves like a commodity.
Geopolitical uncertainty is adding to the pressure.
He also addressed geopolitical headwinds, including tensions related to Iran and uncertainty surrounding the Strait of Hormuz, and said that despite such pressures, Bitcoin’s long-term investment case remains intact.
He added that improved market infrastructure and evolving regulatory frameworks make the current environment stronger than during previous recessions.
Bitcoin was trading at $63,841 at the time of publication, up 3.4% over the past 24 hours, according to data from Coingecko.
Featured image by Silas Stein/picture Alliance via Getty Images, chart by TradingView
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