Guggenheim – Institutional Demand is Not Strong Enough for Bitcoin to Sustain Above $30K
Another bearish forecast for Bitcoin (BTC) has been made by Scott Minerd, Global Chief Investment Officer of Guggenheim. This time around, Minerd has blamed the lack of institutional demand for Bitcoin as the reason for the numero uno currency’s decline.
According to the CIO, the absence of interest from institutions has made it hard for Bitcoin to stay above $30,000. Minerd, while speaking to Bloomberg Television, stated that the quantum of institutional investors interested in Bitcoin is not big enough for the king of crypto to stay at levels above $30,000.
“Right now, the reality of the institutional demand that would support a US$35,000 price or even a US$30,000 price is just not there. I don’t think the investor base is big enough and deep enough right now to support this kind of valuation.”
Minerd, however underlined that Bitcoin is certainly a feasible asset class in the years ahead. After recording the historical high of $42,000 on January 8, Bitcoin faced considerable selling pressure that resulted in a 27% price correction to about $30,600.
Three notable lower highs on the price chart signals further strengthening of the downtrend. The Guggenheim CIO also believes that the downward momentum will further lead Bitcoin’s price lower. However, he clarified that it is quite common to see such kind of price movements in Bitcoin.
“Now that we have all these small investors in the market and they see this kind of momentum trade, they see the opportunity to make money and this is exactly the sort of frothiness that you would expect as you start to approach a market pop.”
A week before, while talking to CNBC, Minerd stated that he anticipates a decline in the prices to $20,000. If the scenario works out, it would result in a correction of over 50% and that has taken place many times during earlier market cycles. The previous time Bitcoin declined by more than 50% was in March 2020 when it declined from slightly above $10,00 to lower than $5,000 in a matter of three weeks.
For a while now, Guggenheim has been maintaining its long-term bullish view of Bitcoin. Last month, Minerd had issued a long-term price target of $400,000 for Bitcoin, based on its fundamentals. As Bitcoin hovers around the psychological support level of $30,000, the forthcoming expiry of Bitcoin options contracts worth $4 billion could be favoring bulls as per seasoned professionals.