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Lucy Nicholson / Reuters
Bitcoin will likely find support at around $ 15,000, Guggenheim CIO Scott Minerd told CNBC. The chief investment officer doesn’t think investors should rush into bitcoin because it will likely consolidate sideways for years to come. “I don’t think people have to be anxious about putting money into bitcoin right now,” Minerd said. Sign up here for our daily newsletter, 10 Things Before The Opening Bell.
According to Guggenheim Investment Director Scott Minerd, Bitcoin may still have room after its recent 50% drop.
In an interview with CNBC on Friday, Minerd explained where he sees bitcoin ultimately finding support amid its volatile selloff: $ 15,000, which is a potential downside of around 55% from current levels.
“The real bottom, when you look at the techniques, $ 10,000 would be the real bottom, you know, it’s probably a little extreme, so I would say $ 15,000,” Minerd explained. This $ 15,000 target is 25% below what some technical analysts consider a likely support level for bitcoin of $ 20,000.
Minerd said that one of the factors behind the explosive rise in bitcoin over the past year was an increase in central bank liquidity, but as that liquidity begins to wane, the price bitcoin should do the same. The Fed has slowly started talking about canceling some of its bond buying programs that began at the height of the COVID-19 pandemic last year.
Considering the further downside potential and the fact that bitcoin took years to digest large price gains, Minerd doesn’t think investors need to rush into cryptocurrency again.
“I don’t think people have to be eager to put money into bitcoin right now,” Minerd said, explaining that bitcoin is expected to consolidate sideways for a few years before its next higher stage.
After peaking near $ 20,000 at the end of 2017, bitcoin fell more than 80% and consolidated for three years before hitting new highs.
Despite Minerd’s bearish outlook for bitcoin in the medium term, he sees the potential for bitcoin to trade much higher in the long term. Guggenheim research has suggested that bitcoin could reach $ 400,000 to $ 600,000 if it successfully competes with gold as an alternative asset class for investors and asset distributors.
Bitcoin traded down 7% to $ 32,815 in Friday morning trades.
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