Coinbase Executive Says the Cryptocurrency Downturn Is a Necessary Phase for Growth
Coinbase Executive Says the Cryptocurrency Downturn Is a Necessary Phase for Growth
The cryptocurrency market led by Bitcoin (BTC) experienced a sharp downturn. However, institutional investors viewed the current volatility as an inevitable process necessary for long-term growth and focused on the market’s resilience.
On February 6 (local time), John D'Agostino, Head of Strategy at Coinbase, said in an interview with the cryptocurrency-focused YouTube channel Paul Barron Network that the recent crash that spread fear across the digital asset market should be seen as a natural phenomenon occurring as an asset class matures. He compared the recent downturn in the crypto market to the volatility observed in major commodities such as crude oil, explaining that the greater an asset’s potential for success, the larger the magnitude of its price swings tends to be.
D'Agostino reaffirmed Bitcoin’s role as a store of value that hedges against inflation. He argued that at a time when traditional assets such as gold or real estate fail to fully outperform inflation over the long term, excluding unique assets like Bitcoin from a portfolio actually increases the likelihood of failing to achieve the investment objective of inflation protection. He emphasized that rather than judging Bitcoin’s value based on short-term price fluctuations, its upside potential should be evaluated from a long-term perspective spanning more than a decade.
Recent market conditions are widely interpreted as a process of portfolio rebalancing by institutional investors rather than panic selling driven by retail investors, unlike in past cycles. D'Agostino pointed out that open interest and trading volumes in the futures market have not dropped sharply enough to signal a market collapse, diagnosing the current situation as closer to a typical period of volatility than full capitulation. In particular, continued inflows into Bitcoin spot ETFs suggest that long-term investors view current price levels as an attractive entry point.
The establishment of a clearer regulatory environment is expected to act as a catalyst for restoring market confidence. D'Agostino predicted that once institutional frameworks such as the U.S. cryptocurrency market structure bill (CLARITY) are in place, the pace of institutional entry will accelerate further. Clear regulations provide the legal foundation institutions need to settle into the digital asset market, which he analyzed would dramatically speed up the process of confirming a market bottom and subsequent recovery.
The future of the digital asset market is expected to become more robust alongside the widespread adoption of blockchain technology. D'Agostino expressed confidence that as all financial assets move toward tokenization, Bitcoin will play a central role, and that the crypto market will fully recover its previous growth trajectory and establish itself as part of mainstream financial infrastructure by the end of 2026. Ultimately, the current painful correction is seen as a necessary rite of passage for digital assets to enter the core of the global financial system.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for any investment losses incurred based on its contents. The information provided should be interpreted solely for informational purposes.*
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