Guggenheim’s Scott Minerd once saw Bitcoin hitting $400,000. Now he says it’s more like $8,000. ‘Everything is suspect’
This crypto market is full of “a bunch of yahoos,” according to Scott Minerd.
The chief investment officer for Guggenheim Partners has changed his tune on this quite a bit.
In December 2020, Minerd told Bloomberg that Bitcoin would climb to $400,000 because its scarcity gave it an upper hand over the Federal Reserve’s “rampant money printing.”
On Wednesday, Minerd was talking to Bloomberg again, in an interview from the World Economic Forum in Davos, and said crypto and Bitcoin had failed to establish themselves as credible institutional investments.
“Everything is suspect,” he added.
But even though Minerd says Bitcoin is a bad investment now, he allowed that Guggenheim had profited from the cryptocurrency in the past. He said Guggenheim bought an unspecified number of Bitcoins at $20,000 but sold whenever the token hit $40,000.
Bitcoin has had a rough 2022. The cryptocurrency has been stuck around the $30,000 range since May 12, when it dropped to a 90-day low of $26,350, according to CoinMarketCap. The cryptocurrency, which makes up about 45% of the crypto market, was trading at about $29,400 on Thursday afternoon, down 57% from its high of $68,789 in November.
Crypto prices have been dropping across the board as analysts say high inflation, the Ukraine war, and the potential of future interest rate hikes by the Federal Reserve have pushed investors toward less risky assets.
The recent collapse of UST, a so-called algorithmic stablecoin, led to billions in losses for investors, and has led government officials like Treasury Secretary Janet Yellen to push for more regulation.
As the world’s financial leaders gathered in Davos this week, the usually staid global economic conference has ventured into the topic of crypto, with many attendees bashing the technology.
International Monetary Fund managing director Kristalina Georgieva went so far as to call some cryptocurrencies pyramid schemes and to say that Bitcoin is not money because it’s not a stable store of value, Fortune reported.
“When somebody promises you a 20% return on something that is not backed by any assets, what would we normally call this? We would call it a pyramid,” Georgieva said during a panel discussion on Monday, Fortune reported.
The governor of the Bank of France, François Villeroy de Galhau, agreed with Georgieva, saying of cryptocurrencies, “They are not reliable currencies; they are not a reliable means of payment.”
As for Guggenheim, Minerd said it no longer holds Bitcoin, and his outlook on all the other cryptocurrencies isn’t so positive either.
“We have 19,000 digital currencies, or cryptos, or whatever we want to call them today—most of them are junk,” he told Bloomberg.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.