In a recent interview on CNBC’s Squawk Box, John D’Agostino, the head of institutional strategy at Coinbase, emphasized the necessity of cryptocurrency for artificial intelligence (AI) agents to function optimally within financial markets. He argued that the existing frameworks of traditional finance are insufficiently equipped to support the rapid advancements in AI technology.
D’Agostino pointed out that if AI agents are to act on behalf of individuals, they require access to “true sources of information.” The use of outdated financial systems could lead to poor outcomes, he warned. “Artificial intelligence is infinitely scalable intelligence,” he said, adding that blockchain serves as a scalable source of truth, making it an ideal partner for AI technologies.
Currently, AI agents have made significant inroads within the cryptocurrency sector. They are increasingly employed for building Web3 applications, managing token launches, and autonomously engaging with various services and protocols. Some platforms are even investigating the application of AI agents for automated trading strategies.
One of the key arguments D’Agostino presented was about the limitations of traditional financial systems that were not designed for real-time, machine-to-machine transactions. He contrasted this with the capabilities of blockchain by stating, “If we’re going to move to this world… they have to act on infinitely fast and scalable money rails.” He compared relying on old financial infrastructure to attempting to stream a movie over a dial-up modem, emphasizing the need for modern solutions in a rapidly changing environment.
Additionally, D’Agostino touched upon the ongoing debate between Bitcoin and gold, noting that the two assets should not be directly compared. He highlighted Bitcoin’s unique features like its programmability, digital nature, and capacity for easy transfer across borders as advantages that gold does not possess. He argued that for those worried about inflation, which is often linked to a global money supply growing at rates of 7% to 8% annually, it is crucial to seek out assets that can outperform that increase.
His bullish stance on Bitcoin was further reinforced by the vast amounts of capital currently idle in money markets, particularly during a period when U.S. interest rates have hovered around 5%. As rates decline, D’Agostino anticipates that some of those assets will flow into cryptocurrencies like Bitcoin, even if this movement is gradual.
The recent decision by the Federal Reserve to cut interest rates for the first time this year on September 17 has created room for speculation regarding further rate adjustments. However, opinions vary, as JPMorgan’s CEO Jamie Dimon expressed skepticism about the Fed’s capacity to reduce rates further unless inflation levels decrease significantly.
On the topic of institutional investment in cryptocurrency, D’Agostino voiced caution. Despite forecasts of a surge in institutional adoption as a major market driver, he explained that institutions are not likely to make hasty investment decisions. “They’re not lemmings running over a cliff in some giant wave. They’re very, very cautious,” he stated, underscoring the deliberate nature of how pensions, endowments, and sovereign wealth funds approach their investment strategies.
As the cryptocurrency landscape continues to evolve, the intersection of crypto and AI appears to be a crucial focal point for future developments in the financial market.
