Bitcoin’s bull run may have peaked and the cryptocurrency could suffer a significant price pullback, according to Guggenheim Partners Chief Investment Officer Scott Minerd.
“For the time being, we have probably put in a top for bitcoin for the next year or so,” Minerd told CNBC on Tuesday, adding that the cryptocurrency could retrace to $20,000.
Bitcoin reached a record high of $41,962 on Jan. 8 and has been mainly restricted to a range of $30,000 to $40,000 ever since. The uptrend began in early October, when the cryptocurrency was trading near $11,000 and went ballistic in the second half of December, with prices rising from $19,000 to $38,000, according to CoinDesk 20 data.
Price pullbacks often follow such big rallies. “When we have a doubling of a price of an asset in the course of a month, we are prone to having a setback,” Minerd said while explaining the rationale behind his forecast for a decline to $20,000.
Minerd told Bloomberg a month ago that bitcoin’s fair value was $400,000 and recently warned of speculative frenzy gripping the market. Guggenheim Partners, which manages more than $230 billion worth of assets, started investing in bitcoin when the cryptocurrency was trading around $10,000.
Minerd also shared his view on traditional markets, pointing to the Federal Reserve’s open-ended liquidity boosting bond purchase program as the main reason for the slump in the U.S dollar.