Bitcoin’s bull run may have peaked and the cryptocurrency could suffer a significant price disadvantage, according to Guggenheim Partners’ Chief Investment Officer, Scott Minerd.
“For the time being, we’ve probably given a peak for bitcoin for the next year or two,” Minerd told CNBC on Tuesday, adding that the cryptocurrency could return to $ 20,000.
Bitcoin reached its all-time high of $ 41,962 on January 8 and has been largely restricted to a range of $ 30,000 to $ 40,000 since then. The uptrend began in early October, when the cryptocurrency was trading near $ 11,000 and ballooned in the second half of December, with prices soaring from $ 19,000 to $ 38,000, according to CoinDesk 20 data.
Price rallies often follow such large rallies. “When we have double the price of an asset in a month’s time, we tend to get stuck,” Minerd said while explaining the rationale behind his forecast for a decline to $ 20,000.
Minerd told Bloomberg a month ago that the fair value of bitcoin was $ 400,000 a recently warned from a speculative frenzy gripping the market. Guggenheim Partners, which manages more than $ 230 billion worth of assets, began investing in bitcoin when the cryptocurrency was trading at around $ 10,000.
Minerd also shared his views on traditional markets, highlighting the Federal Reserve’s open-ended liquidity bond purchase program as the main reason for the fall in US dollar.
The dollar index (DXY), which tracks the value of green versus big money, fell 6.83% in 2020 and recently reached a 34-month minimum of 89.21. “There’s a trend in the dollar for more weakness,” Minerd said.
Bitcoin and the Dollar Index have moved in different directions since the March crash, and the inverse correlation between the two is strengthening.