It looks like the eccentric Tesla CEO Elon Musk is not the only deep-pocketed investor to make a screeching u-turn on bitcoin.
As recently as late February, Scott Minerd, chief investment officer at financial services firm Guggenheim Partners was singing a different tune. He predicted that bitcoin could eventually climb to as high as $600,000. But now the senior executive is referring to the world’s largest cryptocurrency as a ‘Tulipmania’. Minerd’s bearish remarks come amid a horrific bitcoin correction, with BTC plummeting below $33,000 on May 19.
In his tweet, he argued that “supply has swamped demand” while comparing cryptocurrencies to the 17th century Dutch tulip bubble.
Guggenheim filed an amendment with the U.S. Securities Exchange Commission last November to allow its Macro Fund to gain exposure to the flagship cryptocurrency by investing at least 10% of its funds (roughly $530 million) in Grayscale Bitcoin Trust (GBTC).
“This Is Not The Death Of Crypto”
Minerd has since been flip-flopping on crypto assets. The CIO turned heads in December when he proclaimed that bitcoin should be worth $400,000 per coin, before later revising his prediction to $600K.
Last month, however, he said bitcoin was “very frothy” and could register a 50% pullback to the $30K region in the near term. Surprisingly, bitcoin hit an intraday low of $30,681.50 during yesterday’s Black Wednesday catastrophe.
Chronic bitcoin bull and CEO of Galaxy Digital, Mike Novogratz agrees with Minerd’s assessment. He tweeted that “This is an interesting point. The proliferation of cryptos is a supply response that overwhelms demand. Same happened in 2017”. However, Novogratz strongly believes that crypto projects with utility and strong communities will survive and flourish.
Unlike Novogratz, Compound Finance’s founder and CEO Robert Leshner says Minerd is completely wrong, adding: “The supply of cryptocurrencies (#Bitcoin) and crypto assets ($ETH, $COMP, etc) does not increase as a function of price. That’s like saying the supply of stocks increases, as demand does. Lousy look for Guggenheim Partners.”
In a follow-up tweet, Scott Minerd suggested that the price correction does not imply the death of crypto, “just as the collapse of the Tulipmania was not the end of the tulip bulbs,” he added.