Guggenheim CIO Scott Minerd has made another bearish prediction for short term Bitcoin prices.
Guggenheim’s Scott Minerd has come out with another gloomy price outlook for Bitcoin stating that there is not enough institutional demand to keep the asset over $30,000.
The chief investment officer of the financial services firm told Bloomberg Television the institutional investor base was not big enough to sustain the current prices.
“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 added that Bitcoin is still a viable asset class in the long run. Since its all-time high of $42,000 on January 8, Bitcoin has corrected 27% to current prices around $30,600. Three prominent lower highs on the chart suggest that the downtrend is strengthening.
The Guggenheim executive also thinks that this downward pressure has a lot further to go, adding that it is “not uncommon to see squeezes like this”:
“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.”
On January 20, Minerd told CNBC that he expects prices to fully retrace back to $20,000. If this scenario plays out, it would entail a correction of more than 50%, and that has happened several times during previous market cycles. The last time BTC fell by over half was in March 2020 when it dropped from just over $10,000 to below $5,000 in just three weeks.
Guggenheim has not changed its stance on the long term outlook for Bitcoin, however, with Minerd stating in December that the firm’s fundamental work has shown that Bitcoin could be worth about $400,000.
As Bitcoin approaches this psychological support level at $30,000, the imminent expiry of $4 billion in BTC options could favor the bulls according to analysts.