Bitcoin bears in the current cycle may “flush out” weakness according to this leader
Founding and managing partner of Guggenheim Partners, Scott Minerdshared his thoughts on the cryptocurrency market at large in a recent interview with Bloomberg.
He raised the question of how traders could profit from the large price swings going on in the cryptocurrency market. He did, however, offer a word of caution.
Scott stated that because the industry is still deflating, investing in cryptocurrencies may not be a good long-term investment opportunity.
The market is still far from its best state, despite the significant increase in the majority of digital assets following the US Federal Reserve’s decision to raise interest rates.
Furthermore, Minerd also predicted that it could all end up like the Dot-com bubble of the late 1990s.
Bear to eliminate the weak?
According to him, the market will “flush out” more meaningless ventures and keep only those that offer specific applications to the financial network.
However, due to this process, investing in cryptocurrencies can be risky in the long term because it is impossible to predict which assets will survive the crash.
He made that statement despite pressure from international regulators on Bitcoin [BTC] and the alternative cryptocurrencies, well-known institutions have yet to join the ecosystem to give investors more confidence. He said,
“I think it needs to be deflated further and we’re going to have something similar to the collapse of the internet bubble where we have a chance to sort out who are the winners and who are the losers here. And I don’t think we’ve drained the system completely yet.”
In addition, in July, Edward Dowd, a former CEO at Black stonemade a comparison between the current crypto winter and the Dot-com bubble of the early 2000s.
According to his forecast, “strong” digital assets would withstand the upheaval while the useless ones would be destroyed. Dowd further added that BTC could be one of the assets that can succeed in ongoing problems due to its core technology, transparency and the freedom it provides.
Not a first for Minerd
Over the years, the Guggenheim chairman has shared his perspective on the world of digital assets several times, and it has fundamentally changed each time.
In December 2020, the price of Bitcoin surpassed $21,000 for the first time and Minerd stated that the asset should be valued at approx $400,000. He went on to say that his company invested in the king coin when each coin was around $10,000.
The primary cryptocurrency continued to rise in the weeks following December 2020, setting a new all-time high of $40,000.
Nevertheless, after this price increase, there was a downward trend that left the price of one BTC at $33,000. To justify his recommendation that investors should “take some money off the table”, Minerd mentioned this loss.
