Scott Minerd, chief investment officer of the well-known investment firm Guggenheim Partners, says bitcoin (BTC) could experience a 50% drop in the near future because it is going too far, too fast. He made the comments yesterday during an appearance on CNBC’s Worldwide Exchange.
Guggenheim made crypto history last year by setting a $400,000 price target for bitcoin. The company added that it will invest up to 10% of its $5.3 billion Macro Opportunities Fund in the bitcoin trust.
At the time, Minerd explained that bitcoin’s scarcity, combined with the rampant printing of money, underpinned the ambitious goal of breaking bitcoin. But after just a few months, the feelings seemed to change.
Bitcoin rebounds and then goes up.
Apparently, Minderd said he remains optimistic about bitcoin’s long-term price, but that it is now getting too frothy – a colloquial term to describe euphoria in the markets.
Given the huge move we’ve made in bitcoin in a short period of time, things are very arrogant and I think we’re going to have to make a big correction in the assets, he said.
The request is not unfounded. Bitcoin has risen nearly 500% in recent months, from less than $10,000 last July to a high of more than $64,000 earlier this month. This has made it one of the most successful (large-scale) investments in the world, but has generated both interest and scepticism in traditional circles.
I think we could go back to $20,000 or $30,000 in bitcoin, which would be a 50 percent drop, but what’s interesting about bitcoin is that we’ve seen a similar drop before, Minderd said, adding that a drop would be a normal development in a longer-term bull market.
Institutional investors join
This is not the first time Minerd has publicly announced a significant drop in the price of bitcoin. A similar commentary published earlier this year warned of a short-term decline in bitcoin. However, he doesn’t come across as a permabre who keeps claiming that bitcoin is a bubble that will eventually burst.
A parabolic rise in bitcoin is not in the cards in the near future. Vulnerable to losers. Exceeds target technical capacity of $35,000. It’s time to take the money off the table.
– Scott Minerd (@ScottMinerd) January 11, 2021
Meanwhile, other institutional investors seem to be joining the bitcoin rally. Some even say the price recovery has only just begun.
As we reported yesterday, Bill Miller, the legendary institutional investor who bought the asset for $350, said in a statement that this time is different and that bitcoin’s price rally has only just begun.
The supply [of bitcoins] is growing at 2% a year, and the demand is growing faster. That’s all you need to know, and that means it will rise, he noted, adding that bitcoin’s infamous volatility is simply the price you pay for performance.
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