Scott Minerd – the chief investment officer at Guggenheim – says bitcoin could potentially bottom out at a measly $8,000 per unit in the coming weeks.
Scott Minerd on the Future of Crypto
The crypto space has been under duress over the past several months. Bitcoin, for example, is significantly down from its all-time high of $68,000 that it initially achieved in November of last year. However, since then, the currency has been undergoing a series of drops that has seen if fall more than 50 percent below that $68K figure. It is presently trading in the high $29,000 range – about $40K down from the previously-mentioned high.
There has been a lot of debate over the past few weeks regarding whether the world’s number one digital currency by market cap can fight back against the incoming bears. Some analysts believe that the currency may experience further dips before things ultimately get better, and Minerd is among them.
If he is right and the currency were to drop to $8,000 per unit, that would represent an overall drop of around 70 percent. This is basically the same exact thing that happened at the end of 2018. That year followed 2017 (duh!), which up to that point in time, was considered the strongest year for bitcoin yet. The currency had hit an all-time high of just under $20K, but 2018 was marred by heavy dips that eventually saw BTC trading for around $3,500 in November. This represented a 70 percent drop from the end of 2017.
Thus, it looks like 2022 is exhibiting a lot of the same behavior. Minerd explained in an interview:
When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive.
However, despite this prediction of gloom and doom, Minerd did offer some good news for diehard fans of the crypto space. He commented that most of the digital currencies out there were “junk” and served no purpose, though he is confident that bitcoin and Ethereum are large and strong enough to survive the crypto bloodbath. He stated:
Most of these currencies, they’re not currencies, they’re junk.
However, he stated that he didn’t think BTC would be the primary cryptocurrency, claiming:
I don’t think we’ve seen the dominant player in crypto yet.
Is Bitcoin Like the Dotcom Bubble?
Finishing his interview, he compared the crypto space to the dotcom bubble of the early 2000s, saying:
If we were sitting here in the internet bubble, we would be talking about how Yahoo and America Online were the great winners. Everything else, we couldn’t tell you if Amazon or Pets.com was going to be the winner. I don’t think we have had the right prototype yet for crypto. None of these things pass. They don’t even pass on one basis.