Bitcoin could drop further and fall to $8,000 from its current levels, Guggenheim Chief Investment Officer Scott Minerd predicted Monday.
That would represent a more than 70% drop to Monday morning’s price of just over $30,000.
“When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive,” Minerd told CNBC’s Andrew Ross Sorkin in a “Squawk Box” interview at the World Economic Forum in Davos, Switzerland on Monday.
Minerd is referring to the U.S. Federal Reserve’s hiking of interest rates and tightening of monetary policy.
Since falling below $30,000 earlier this month, bitcoin has struggled to rally substantially above that level. It has regularly dipped below $30,000.
If Minerd’s forecast comes true, it would inflict further pain on bitcoin and the broader cryptocurrency market which has seen around $500 billion wiped off its value in the past month. Bitcoin is down around 24% in the last 30 days alone.
The CIO also said that most crypto is “junk” but that bitcoin and ethereum will survive.
“Most of these currencies, they’re not currencies, they’re junk,” he said.
Even so, he said, “I don’t think we’ve seen the dominant player in crypto yet.”
Minerd compared the current situation to the dotcom bubble of the early 2000s.
“If we were sitting here in the internet bubble, we would be talking about how Yahoo and America Online were the great winners,” he said. “Everything else, we couldn’t tell you if Amazon or Pets.com was going to be the winner.”
“I don’t think we have had the right prototype yet for crypto,” he said, saying that currency needs to store value, be a medium of exchange and unit of account.
“None of these things pass, they don’t even pass on one basis,” he said. Minerd added that additional technological advances could change that and help create an ecosystem where people get used to using cryptocurrencies for transactions and are confident they will hold their value.
Minerd’s comments come after European Central Bank President Christine Lagarde said cryptocurrencies are “worth nothing.”