Guggenheim CIO – Current Bitcoin Uptrend is Not Sustainable
Scott Minerd, Chief Investment Officer (CIO) of investment company Guggenheim, has stated that the price of Bitcoin has the capability to hit $600,000 ultimately.
While speaking to CNN, the investment professional stated that his fund’s in-depth study on Bitcoin for over a decade indicates that the cryptocurrency can easily attain the price level mentioned above.
If Bitcoin’s supply matches gold then the price would be $400,000-$600,000, as per his computations.
“If you consider the supply of Bitcoin relative … to the supply of gold in the world, and what the total value of gold is, if Bitcoin were to go to those kinds of numbers, you’d be talking about $400,000 to $600,000 per Bitcoin.”
Since November 2020, Bitcoin has been rising. The uptrend gathered momentum last month when the price hit an all-time peak of more than $41,000.
The price, nevertheless, underwent a correction to $30,000 level, which made the crypto enthusiasts and investors think whether a bear market has begun or the start of a retracement to $20,000.
“Cryptocurrency has come into the realm of respectability & will continue to become more and more important in the global economy.” @ScottMinerd talks $GME / $SLV / $BTC and the logic of bubbles versus buying frenzy. pic.twitter.com/ZWoZqZNU2M
— Julia Chatterley (@jchatterleyCNN) February 2, 2021
As per Minerd, the decline was mainly due profit booking by large investors and hesitation of institutions in backing a steep uptrend. Nevertheless, he is optimistic that the institutional involvement will increase and boost Bitcoin’s ability to maintain its uptrend as it starts playing major role in the world economy.
“Cryptocurrency has come into the realm of respectability and will continue to become more and more important in the global economy.”
The price target of $600,000 reflects an upward revision from $400,000 that Minerd earlier forecast as the target price for Bitcoin.
It is needless to state that institutional involvement is necessary to push Bitcoin to further higher levels. Following the decline to $30,000, JP Morgan analysts have stated that Grayscale, the largest cryptocurrency management fund facilitating exposure to digital assets for institutions, will play a pivotal role in pushing the price to over $40,000 from where it underwent a price correction.
At the time of writing this article, the price of Bitcoin was trading at $39,298. Market participants are eagerly watching the movement to open fresh positions at the right time. Interestingly, Grayscale’s funds lock-up ended last Wednesday, and many believe that it could be the main reason for the latest uptrend above $35,000.