Guggenheim Partners founder Scott Minerd says a $600,000 Bitcoin is still in the cards, but investors may have to prepare for a further drawdown before BTC can start rising again.
In an interview with CNBC, Minerd discusses the possibility of Bitcoin losing over 50% of its based on historical price action.
[adinserter block="1"]“Every major run-up in Bitcoin, there has been about an 80% crash. Now, that would make a lot of sense in a lot of ways because that would bring us back into the neighborhood of $15,000.
I’ve been saying between $20,000 and $30,000. The real bottom when you look at the technicals is $10,000, and you know that’s sort of extreme – I would say $15,000. If it got to 20,000, I wouldn’t be in a hurry to buy it because when markets like this wash out, usually it takes a couple of years of consolidation.”
Although Minerd is preparing for a steeper fall for the flagship cryptocurrency, he remains bullish long term, noting that if Bitcoin does become an asset on par with gold, it would have an upside potential of over 1,660% from its current value of around $34,000.
“Our research shows that as a store of value, and that’s a debatable point, that if you were to compare it against gold, you’d be at somewhere between $400,000 and $600,000.”
For now, Minerd says that Bitcoin is not big enough to be adopted by some of the largest financial institutions around the world.
“Sovereign wealth funds don’t find cryptocurrencies to have matured enough to become an asset class so without large flows of capital coming from the institutional sector it remains a highly volatile speculative asset and the volatility scares institutional money away and so retail is willing to speculate and is often caught up in mania and os once they’ve exhausted all of their savings there’s no one else left to buy.”
As the top cryptocurrency briefly lost $30,000 on Tuesday, Minerd commented that if Bitcoin convincingly loses the $30,000 area, the next level of support is not until $20,000.
“Look for more declines in crypto as Bitcoin breaks through support. Next likely support level is $20,000.”
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