In 2018, the recurring „meme“ in the crypto space was that institutions were coming to accumulate Bitcoin to save the then volatile market and put it on a growth path.
In 2020, this meme became a reality as prominent fund managers and companies began accumulating Bitcoin. It started with Paul Tudor Jones, a legendary macro hedge fund manager, who was then followed by a number of other well-known Wall Street names.
Scott Minerd, the global CIO of Guggenheim Investments, is the latest fund manager to join the bitcoin craze in November and December. He told Bloomberg in December that the cryptocurrency could reach $400,000 over time, given Bitcoin’s scarcity and previous periods of growth.
This was one of the most bullish statements ever made about bitcoin by an active money manager. But at least in the short term, sentiment seems to have changed, as Minerd warns that it may be time for crypto investors to lock in some profits.
„Take money off the table“
Amid Sunday night’s correction that saw BTC fall from $40,000 to $34,000, Minerd said bitcoin is „vulnerable to a setback“ as it would have entered an unsustainable growth phase:
„Bitcoin’s parabolic rise is unsustainable in the short term. Vulnerable to a setback. The technical upside target of $35,000 has been exceeded. Time to take some money off the table.“
Bitcoin’s parabolic rise is unsustainable in the near term. Vulnerable to a setback. The target technical upside of $35,000 has been exceeded. Time to take some money off the table.
– Scott Minerd (@ScottMinerd) January 11, 2021
This is the third time Minerd has mentioned Bitcoin on his Twitter account. The last time was in November 2017, when he said the cryptocurrency market correction „isn’t over.“
While Minerd is a respected money manager, his comments have surprised many in the crypto space.
Dan Tapiero, a macro investor focused on crypto, reacted to Minerd’s comments with a question mark.
Others also commented that this could be an attempt to shake out weak hands before Bitcoin moves higher.
The cryptocurrency regularly faced sharp 20-30 percent corrections in previous bull markets before moving toward new all-time highs.
Macro trends still bullish for BTC
While Minerd may be bearish on bitcoin in the short term, macro trends remain bullish for this market.
In his Bloomberg interview where he made the $400,000 prediction, he emphasized that the cryptocurrency has a long-term fundamental framework that indicates there is macro growth potential:
„It’s based on scarcity and relative valuation like things like gold as a percentage of GDP. So you know, Bitcoin actually has many of the attributes of gold while having an unusual value in terms of transactions.“
To put this in context: New President Joseph Biden is calling for a trillion-dollar additional stimulus program to save the American economy. Many in the global markets expect this to drive the U.S. dollar down and alternative assets like bitcoin up (get in ahead of time? Go to the buy bitcoin cheap guide).