Guggenheim Partners CIO Scott Minerd believes there is going to be a crypto washout similar to the internet bubble. “There’s another shoe to drop,” he warned. Nonetheless, the executive is confident that the crypto industry will move forward despite the collapse of crypto exchange FTX.
Guggenheim’s Scott Minerd Shares Crypto Outlook
Guggenheim Partners Global Chief Investment Officer (CIO) Scott Minerd shared in an interview with Bloomberg last week his thoughts on the future of cryptocurrency following the implosion of crypto exchange in FTX.
He was asked if he has confidence that bitcoin and crypto can move forward given the FTX fallout, subsequent contagion, and recent crypto market sell-offs. Minerd replied: “I do.”
The CIO then proceeded to detail: “A year ago we were talking about crypto, and there were approximately 19,000 coins, to which my comment was, ‘this is mostly crap.’” He warned:
There is going to be a washout.
“Just like the internet bubble, we will have survivors. The digitization of currency is just in its infancy, and how this evolves now is going to require a regulatory framework to legitimize it,” he opined. “I think we will move forward and I think this will transfer to the general economy.”
According to Minerd, Guggenheim bought some bitcoin at $20,000, which the investment management firm subsequently sold when the price of BTC reached $40,000.
While the Guggenheim executive warned, “There’s another shoe to drop,” he emphasized: “I can’t tell you where it is.” Minerd elaborated:
I think there’s more to come … and the reason is this is just like any number of periods where we had easy money and a lot of speculation — the weakest players fall first. Crypto was obviously something that is crazy.
Minerd was bullish on the price of bitcoin in early 2021. At that time, he predicted that the cryptocurrency’s fair value would increase to about $600,000. However, the Guggenheim executive became less bullish over time. In May, he predicted that the price of BTC could fall to $8,000, advising investors to short sell the cryptocurrency.