The current rally in %Bitcoin (CRYPTO: $BTC) that has pushed its price as high as $94,000 U.S. is being driven by institutional investors, according to crypto exchange %Coinbase Global (NASDAQ: $COIN).
In a media interview, Coinbase Global’s Head of Strategy John D’Agostino said that retail investors continue to remain on the sidelines when it comes to cryptocurrencies.
D’Agostino said that data shows institutional investors and sovereign wealth funds have been quietly accumulating Bitcoin in recent weeks, pushing the price back above $90,000 U.S.
At the same time, retail investors continue to pull money from both spot Bitcoin and %Ethereum (CRYPTO: $ETH) exchange-traded funds (ETFs).
D’Agostino said the working theory at Coinbase is that de-dollarization is driving institutional investors back into cryptocurrencies.
Sovereign wealth funds and institutions are essentially turning to crypto as they reduce their exposure to the U.S. dollar.
Also, Bitcoin and other cryptocurrencies appear to be decoupling from technology stocks that they once traded in tandem with, such as chipmaker %Nvidia (NASDAQ: $NVDA).
Lastly, a growing number of institutions are beginning to accept that Bitcoin could be a hedge against inflation and are buying the digital asset for future downside protection.
“Bitcoin is trading on its core characteristics, which are similar to gold,” said D’Agostino.
The price of Bitcoin is currently trading at $92,600 U.S., down 0.88% on the year.
