According to John D’Agostino, head of institutional strategy at Coinbase, crypto is essential for the efficient operation of AI-powered agents within the financial market, as traditional financial systems are outdated.
D’Agostino emphasized that if AI agents are to represent individuals, they must rely on “true sources of information” due to the potential “disastrous” consequences of failure. He shared this insight on CNBC’s Squawk Box on Tuesday.
“Artificial intelligence represents infinitely scalable intelligence, and when you consider blockchain as the foundational technology for crypto—an infinitely scalable source of truth—the synergy is clear,” he stated.
AI agents are already prevalent in the crypto space, facilitating the development of Web3 applications, launching tokens, and autonomously engaging with various services and protocols, with some platforms considering AI for trading functions.
AI Agents Require Swift Transactions
D’Agostino pointed out that traditional financial systems were not built for real-time, machine-to-machine transactions at scale, noting that employing AI agents on “100-year-old financial rails” is impractical.
“To leverage the advantages of these agents working at incredibly fast speeds, they must operate on equally fast and scalable money rails—something that blockchain and crypto provide,” he explained.
“You wouldn’t attempt to stream a movie over a dial-up modem; similarly, you shouldn’t expect these AI agents to transact within a financial system that predates those modems.”
No Value in Comparing Bitcoin to Gold
D’Agostino also addressed the ongoing discussions surrounding Bitcoin’s (BTC) performance in relation to gold, arguing that the two assets should not be compared due to Bitcoin’s unique attributes.
“Bitcoin is programmable, digital, and infinitely scalable in terms of transferability. You can move it easily across borders, and it generates a yield,” he noted.
“For those concerned about the global money supply growing at rates of 7% to 8% annually, which you may see as excessive and inflationary, you need assets that can outperform that growth.”
He remains optimistic about Bitcoin’s prospects due to the trillions in money markets that were held back due to higher interest rates in the U.S. striving to combat inflation.
“As interest rates decrease, more of these assets will find their way into Bitcoin and similar assets,” he said.
Related: Crypto users open to AI managing their portfolios: Survey
The Federal Reserve reduced interest rates for the first time this year on Sept. 17, with potential further cuts anticipated. However, JPMorgan CEO Jamie Dimon expressed skepticism about additional rate decreases, citing challenges unless inflation subsides.
Institutions Aren’t “Lemmings” Following Market Trends
D’Agostino raised concerns about the expected surge in institutional crypto adoption, which many view as crucial for market growth.
While institutions are already involved and more may join, he believes the shift will not happen suddenly or dramatically.
“Many speak of an institutional wave, but from my interactions with pensions, endowments, and sovereign wealth funds, they do not invest impulsively,” he remarked.
“They’re not lemmings rushing towards a cliff. They proceed with caution and thoughtfulness.”
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