John D’Agostino, the Head of Institutional Strategy at Coinbase, recently shared insights on market volatility during an appearance on CNBC. He highlighted that the current decline, while significant in dollar terms, reflects the typical percentage fluctuations seen in the cryptocurrency market.
When asked about Strategy Inc., known for being the largest corporate holder of Bitcoin, D’Agostino defended CEO Michael Saylor amid rumors of potential forced selling. He stated, “I’ve seen no evidence that Saylor is not telling the truth,” reinforcing confidence in Strategy’s position despite ongoing speculation.
D’Agostino noted that Bitcoin has historically experienced drawdowns ranging from 70% to 80% prior to embarking on sustained multi-year rallies. “If you like this asset, you should like it at a discount,” he remarked. Currently, Strategy Inc. holds 717,131 Bitcoin at an average acquisition cost of about $76,027 each. With Bitcoin’s current trading price hovering around $68,000, the company’s holdings are considered to be underperforming.
Despite this situation, Saylor downplayed concerns regarding forced liquidations during a February interview, stating that the fears were unfounded. He mentioned that the company is equipped with 2.5 years’ worth of cash dividends to manage its debt. Furthermore, Strategy’s CEO, Phong Le, reinforced this stance in a recent Bloomberg interview, declaring that a liquidation scenario would only arise if Bitcoin were to plummet by 90% and remain at that level for five years—a situation he characterized as highly improbable.
In the realm of betting markets, there is currently a 12% probability assigned to the likelihood of Strategy selling any of its Bitcoin holdings by the end of the year, with more than $20 million wagered on that outcome.
Simultaneously, D’Agostino’s remarks come as Coinbase faces its own challenges, having recently reported fourth-quarter earnings that fell short of expectations. In response to the disappointing results, Piper Sandler revised its price target for Coinbase shares from $270 to $150, further underscoring the pressures within the cryptocurrency sector.
