Coinbase Executive Attributes Bitcoin’s April Rally to Institutional Support as Retail Pulls Out of ETFs

Bitcoin’s rally to $93,000 this month has been predominantly driven by institutional capital, not retail investors flocking to exchange-traded funds (ETFs), according to Coinbase Institutional’s John D’Agostino in a CNBC interview.

The surge that began in early April was fueled by large institutions and sovereign wealth funds quietly amassing Bitcoin with substantial, long-term capital, while retail investors have been pulling out of spot Bitcoin ETFs. D’Agostino speculated that institutions are capitalizing on the opportunity, while retail investors are stepping back. This raised questions about what institutional players might know that retail traders don’t.

The growing institutional interest is also evident in the creation of Twenty One Capital, a Bitcoin investment firm backed by Tether, Bitfinex, and SoftBank. The firm plans to start with over 42,000 BTC and will go public under the ticker “XXI” after a merger with Cantor Equity Partners, a $200 million special purpose acquisition company (SPAC).

D’Agostino outlined three key reasons behind the institutional rush. First, there is a global trend towards de-dollarization, with sovereigns and large institutions reducing their USD exposure as global trade slows. Second, Bitcoin is increasingly decoupling from the tech sector, moving away from the performance of stocks like Nvidia. Third, Bitcoin is gaining traction as a hedge against inflation, gaining recognition as a legitimate asset class for commodities traders.

“Bitcoin is trading as a scarce, immutable asset—much like gold—which is why it’s finding its footing,” D’Agostino said. “It’s being embraced for what it fundamentally represents.”

Meanwhile, altcoins like Ether (ETH), Solana (SOL), and Cardano (ADA) have not shown similar technical strength. The CoinDesk 20 index, tracking the top digital assets, has dropped by 3% over the last month, while Bitcoin has gained 7%.

This has spurred some renewed interest in Bitcoin ETFs, with data from SoSoValue indicating that ETF inflows exceeded $900 million for two consecutive days this week, bringing the total ETF inflows from April 21-23 to over $2.2 billion. However, the month has seen several days of net outflows from Bitcoin ETFs, with $1.21 billion in redemptions.