Guggenheim Partners warn of possible bitcoin price decline

The aggregate capitalization of the cryptocurrency market will fall below its recent local minimum as the industry has not yet “cleaned up” from problematic participants, according to Scott Minerd, chief investment officer of Guggenheim Partners, in an interview with Bloomberg.

“I think the market will continue to deflate. I think we are in for something akin to the dot-com crash, so that there is an opportunity to understand who here are the winners and who the losers. I don’t think we have fully cleaned up the system yet,” he said.

In the short term, Minerd said, cryptocurrency prices may rise, which could be a good opportunity for speculators to profit.

He stressed that in the long term the industry will face problems. In his view, regulatory pressure and the lack of strong institutional support will weigh on it.

27 July, the U.S. Federal Reserve (Fed) raised the target range for the federal funds rate by 75 basis points, to 2.25–2.5%. The cryptocurrency market reacted to the decision by rising — on July 28 bitcoin rose above $23,000, Ethereum broke above the $1,600 level.

The CIO of Guggenheim Partners expects that inflation in the United States for 2022 will run above the regulator’s target. In his view, the figure will be 5–6%. He also said that “it’s hard to deny” a recession in the U.S. economy.

Earlier in May, Minerd allowed a drop in bitcoin’s price to $8,000.

Follow Bitcoin news from ForkLog on our Telegram — cryptocurrency news, prices and analysis.