- Big investors are turning to Bitcoin as global trade slows and confidence in the U.S. dollar fades.
- Bitcoin buying rises as institutions rethink fiat reliance amid growing concerns of economic shifts.
- Bitcoin’s role is evolving, with major funds treating it more like a stable store of value than before.
With the surge in institutional interest and the change in mindset on the strength of the U.S. dollar, Bitcoin is now above $94,500. Speaking on CNBC’s Squawk Box, Coinbase Institutional Head of Strategy John D’Agostino pointed out the mainstreaming of large financial institutions in Bitcoin markets as entities such as sovereign wealth funds and insurance pools are buying the asset.
The price of Bitcoin rose 3.67% in the past 24 hours and 6.68% over two days, climbing from $88,570 to a high of $94,510 on Wednesday. However, D’Agostino pointed to short term market conditions, such as macroeconomic pressures and uncertainties of global trade as key drivers of the increased purchase of Bitcoin from major financial entities.
Institutions Shift Strategy as Confidence in The Dollar Declines
D’Agostino suggested many institutions could be acting in response to a new environment where global trade, by far the world’s biggest, is primarily settled in U.S. dollars. Tightening tariffs and economic restrictions of international commerce are projected to diminish the demand for the dollar.
“All of this is starting to engender what one often hears referred to as ‘de dollarization’ by institutional investors who now are beginning to reassess how their asset allocation strategies look,” he said.
In this light, Bitcoin is beginning to be regarded as a reserve asset. Institutions are said to have already started holding Bitcoin rather than converting it into fiat currency. When d’Agostino needed to sell Bitcoin for the fiat, these entities typically sold Bitcoin, he explained. Nevertheless, with the dollar outlook on its way back to its boom times in 2006, lots are opting not to liquidate their Bitcoin, but rather to hold on to it.
This behavioral shift marks a significant development in how institutional investors approach digital assets. While speculative interest has long characterized retail engagement with Bitcoin, the growing presence of large, long-term financial players indicates a structural change in market dynamics.
Bitcoin’s Market Behavior Diverges from Traditional Equities
According to D’Agostino, Bitcoin has also been evolving in terms of its association with the rest of the stock market. Accordingly, he pointed out that the correlation of the cryptocurrency with equities is not a static one. A negative correlation has been the tendency of Bitcoin to move inversely to stocks in market stress. On the other hand, in more stable, or more bullish environments, in other words, Bitcoin has sometimes been correlated to upward trends in the traditional market.
This variability, D’Agostino suggested, reflects Bitcoin’s complex and still-developing identity as a financial instrument. While some investors continue to treat it as a speculative asset, others are beginning to assign it properties similar to those of gold particularly in uncertain economic conditions.
Institutional traders have begun to embrace the idea of Bitcoin as a “digital gold” and they now regard it as a hedge against market instability. In line with the present investment behavior, where purchases of Bitcoin have escalated despite warnings regarding the extreme fragmentation as well as instability of the currencies, this perspective is in agreement.
D’Agostino pointed out that while the current surge of institutional buying is huge, the environment remains extremely fluid. ‘The factors driving Bitcoin’s price today could lead to exactly opposite outcomes if the economic signals were the same but the underlying conditions not.’
As financial institutions respond to changing global dynamics, the role of Bitcoin appears to be shifting in real time. Its performance, no longer entirely reliant on retail momentum or technological hype, is increasingly tied to broader economic expectations and the strategic decisions of major investors.
