Bitcoin could plunge to $8,000
Bitcoin has continuously struggled to recover from a drop below $30,000/coin earlier this month. (Image: Getty Images)
Share in an interview with CNBC at the World Economic Forum (WEF) taking place in Davos, Mr. Scott Minerd, Chief Investment Officer of Guggenheim, forecast Bitcoin may drop sharply and reach the level of 8,000 USD/VND.
The fall to the landmark 8,000 USD equivalent to a loss of 70% compared to the market price 30,000 USD/coin being traded of Bitcoin. Compared to the historic peak, Bitcoin will also lose about 88% of its value.
“As Bitcoin continuously loses the $30,000 mark, the final bottom could be at $8,000. I think there is still a lot of room for this cryptocurrency to continue to decline, especially in the context of the US Federal Reserve (FED) tightening monetary policy and raising interest rates,” Mr. Minerd analyzed.
The director also said that most cryptocurrencies are junk, but Bitcoin and Ethereum will probably survive. However, Bitcoin may not be the dominant cryptocurrency yet.
Since falling below the mark 30,000 USD/coin at the beginning of this month, Bitcoin continuously struggled to recover. However, the world’s largest digital currency remains under selling pressure and is trading below this mark.
Scott Minerd, Global Investment Manager of Guggenheim Partners LLC, at WEF, Davos, Switzerland May 23. (Photo: CNBC)
If Minerd’s forecast comes true, it will be a painful blow to Bitcoin and the crypto market. In the past month alone, this market capitalization has evaporated 500 billion USD. The Bitcoin price has also dropped 24% in just the past 30 days.
Mr. Minerd compares the current situation to the dotcom bubble that occurred in the early 2000s. “If we were in an Internet bubble, we would talk about how big winners were Yahoo or America Online.” “Meanwhile, we can’t say Amazon or Pets.com will win,” he said.
The market does not yet have a standard cryptocurrency model, according to Minerd. In addition, cryptocurrencies need to act as a store of value, as a medium of exchange and as a unit of account.
“There is currently no cryptocurrency that achieves these things, not even any,” commented Mr. Minerd, adding that technological advancements are likely to change that, helping to create a an ecosystem where people are used to using virtual currencies to transact and are confident that they can keep their value.
Earlier, during the talk show “College Tour” of the Netherlands, European Central Bank (ECB) President Christine Lagarde described cryptocurrencies as “worthless”.
“Cryptocurrencies are worthless in my humble opinion,” Ms. Lagarde said, “they have no foundation and no underlying asset that serves as a guarantee of safety.”
The ECB President called on global lawmakers to introduce regulations to protect inexperienced investors who are betting big on digital assets.
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