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Bitcoin (BTC) started to skyrocket in December last year, demolished the previous December 2017 record, and even set a new all-time high just shy of $42,000 early this month. However, recent profit-taking has forced the crypto’s price to retreat and BTC is trading above 32,400 at the time of writing based on data from CoinMarketCap.
However, a senior executive at financial services firm Guggenheim Partners believes that Bitcoin’s correction is far from over. In fact, Guggenheim’s chief investment officer Scott Minerd argued that BTC is bound to suffer an even more significant price pullback that could drag the crypto down to $20,000, according to Coindesk.
“I think, for the time being, we probably put in the top for bitcoin for the next year or so,” the Guggenheim CIO said on CNBC’s Closing Bell on January 21. “And we're likely to see a full retracement back toward the 20,000 level.”
While Bitcoin’s rise started in early October last year when it was still trading at $11,000, the crypto’s price started to skyrocket in the second half of December. BTC doubled its price from just $19,000 to $38,000 when the year ended.
Unfortunately, such big rallies are often followed by major price pullbacks, which could happen to Bitcoin. “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 explained why he thinks the crypto could decline to $20,000.
While Minerd is short-term bearish on Bitcoin, the Guggenheim executive appears to be also long-term bullish on the crypto, according to Cointelegraph. Last month, the CIO expressed his stance that BTC’s fair value was $400,000, a price level that the crypto could reach one day.
Guggenheim entered the crypto industry after it filed an amendment with the SEC in November 2020 to allow its fund to gain exposure in BTC. “The Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (“GBTC”), a privately offered investment vehicle that invests in bitcoin,” Guggenheim wrote in its SEC filing. “To the extent, the Fund invests in GBTC, it will do so through the Subsidiary.”
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