According to John D’Agostino, head of institutional strategy at Coinbase, crypto is essential for artificial intelligence-powered agents to function efficiently in the financial market, as traditional finance infrastructure is outdated.
D’Agostino told CNBC’s Squawk Box on Tuesday that AI agents acting on behalf of individuals require “true sources of information” to avoid disastrous outcomes.
He explained, “Artificial intelligence represents infinitely scalable intelligence, and when considering blockchain—the underlying technology for crypto— as an infinitely scalable source of truth, it’s clear these technologies complement each other effectively.”
AI agents are already prevalent in the crypto space, being used to develop Web3 applications, launch tokens, and autonomously engage with services and protocols, with some platforms investigating AI agents for trading purposes.
AI agents require faster money
D’Agostino remarked to CNBC that traditional financial infrastructures are ill-equipped for real-time, machine-to-machine transactions at scale, asserting that relying on “100-year-old financial rails” for AI agents will be ineffective.
“To transition to a realm where these agents can operate at infinitely fast speeds, they require equally fast and scalable financial systems. That’s precisely what blockchain and crypto provide,” he stated.
“You wouldn’t stream a movie on a dial-up modem. Similarly, you shouldn’t expect AI agents to transact through a financial system that’s older than those modems.”
No reason for Bitcoin vs. gold debate
D’Agostino remarked that while Bitcoin’s (BTC) performance relative to gold is a commonly debated topic, the two should not be compared, as Bitcoin possesses unique attributes absent in gold.
He pointed out, “Bitcoin is programmable, digital, and infinitely scalable in terms of transfer. It’s easy to move and yields returns, unlike gold.”
“For those seriously concerned about a global money supply growing at 7%, 8% annually, which could be excessive, it’s crucial to seek assets that can outperform that growth.”
D’Agostino expressed optimism regarding Bitcoin due to the trillions of dollars parked in money markets when US interest rates were at 5% in an attempt to combat inflation.
“As interest rates decrease, these assets will gradually become available. While not all will move into Bitcoin, a certain portion will,” he predicted.
Related: Survey: Crypto users accepting AI involvement in their portfolios
The Federal Reserve lowered rates for the first time this year on September 17, with the potential for further cuts, although JPMorgan CEO Jamie Dimon expressed skepticism about additional rate reductions, predicting challenges unless inflation eases.
Institutions are not “lemmings running over a cliff”
D’Agostino voiced skepticism about a significant wave of institutional crypto adoption, often anticipated to drive market growth.
While institutions are active in the space and more may follow, a rapid, monumental shift is unlikely, according to D’Agostino.
“Many discuss this institutional wave, but from my experience with pensions, endowments, and sovereign wealth funds, they don’t invest impulsively,” he asserted.
“They’re not lemmings rushing off a cliff. They approach decisions with a great deal of caution and thoughtfulness.”
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