Guggenheim Partners founder Scott Minerd expects Bitcoin (BTC) to keep ceding ground on the price charts now that it has repeatedly buckled at a key support level.
In an interview with CNBC’s Andrew Ross Sorkin while attending the World Economic Forum in Davos, Switzerland, Minerd discusses the possibility of Bitcoin even dropping below $10,000 if it can’t find support at $30,000.
“It’s more of a symptom, it’s like the canary in the coal mine. We’re seeing crypto collapse the way it is, I think it’s got more downside to it.
When I look at Bitcoin, which the technicals have been better than anything else, when we break below $30,000 consistently, then $8,000 is the ultimate bottom.”
The chief investment officer adds that in the wake of the Fed raising interest rates, pressure will be put on the overall crypto industry which he believes has many worthless projects.
“I think we’ve got a lot more room to the downside, especially with the Fed being restrictive. And let’s face it, most of these currencies are not currencies, they’re junk.
The majority of crypto is garbage [but] there are going to be survivors and crypto is the future.”
Minerd goes on to explain that he isn’t even sure that the leading two cryptocurrencies, Bitcoin and Ethereum (ETH), will triumph in the end just as no one could predict the ultimate winner during the internet business craze which began over two decades ago.
“I think Ethereum and Bitcoin will be survivors, but I don’t think we’ve seen the dominant player in crypto yet.
This is like the internet bubble. We would be talking about how Yahoo! and America Online (AOL) were the great winners. We couldn’t tell you if Amazon or Pets.com was going to be the winner.
We didn’t have Google yet. America Online, the dial-up service died, so I don’t think we’ve had the right prototype yet for crypto.”
Minerd concludes by voicing his skepticism about existing crypto assets being able to fulfill the traditional expectations of an investment class. He awaits a future technological development to ultimately deliver what’s needed for the industry’s reputation and value.
“The definition of currency is that it’s a store of value, a medium of exchange, and a unit of account. None of these things pass. They don’t even pass on one basis.
Technology will come along and there will be a point where if you can create an ecosystem where we can actually use these things for transactional purposes and people feel comfortable that they hold their value.
Stablecoins are an interesting attempt at that, but candidly, if we’re going to exchange it at a set rate like a currency board, then it’s going to get regulated like currency.”
Last summer when Bitcoin was also trading around the $30,000 level, Minerd said that BTC was at risk of correcting heavily.
At time of writing, Bitcoin is up 1.73% over the last 24 hours and trading for $29,692. A month ago BTC was priced at a hair below $40,000, which it briefly surpassed on April 25th and 26th.
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