[Asia Economy New York=Special Correspondent Joselgina] Scott Minerd, Chief Investment Officer (CIO) of Guggenheim Investments, a global asset management firm, warned on the 23rd (local time) that Bitcoin, the leading cryptocurrency, could crash to $8,000. This means that Bitcoin, which has sharply declined this year, could fall more than 70% from its current price.
According to the U.S. economic media CNBC, Minerd CIO stated in a Squawk Box interview held at the World Economic Forum (WEF) annual meeting in Davos, Switzerland, on the same day, "Considering the Federal Reserve's (Fed) tightening moves, there is a very high possibility that (Bitcoin) will fall further." He predicted that if Bitcoin, currently trading around $30,000, continues to drop below this level, "$8,000 will be the ultimate bottom."
Bitcoin reached an all-time high of $67,802.30 on November 9 last year. However, due to the Fed's monetary tightening, increased concerns about economic slowdown, and recently the collapse of the Korean cryptocurrency Luna, the situation has worsened, and Bitcoin has recently fallen below $30,000. As of this day, it is trading at $29,342.40, down 1.99% from the previous session. The decline over the past month is about 24%.
CNBC pointed out that Minerd CIO's forecast implies a drop of more than 70% from the current price. If this prediction comes true, it would cause even greater pain to the cryptocurrency market, which has already lost about $500 billion in the past month, the media reported.
Minerd CIO viewed most cryptocurrencies negatively, calling them "junk" rather than currency. However, he predicted that the leading cryptocurrencies, Bitcoin and Ethereum, would survive. He compared the recent situation in the cryptocurrency market to the early 2000s "dot-com bubble." He further evaluated that currently, cryptocurrencies fail to meet any of the three elements of currency: store of value, medium of exchange, and unit of account.
These remarks attracted more attention as they came after Christine Lagarde, President of the European Central Bank (ECB), recently said that cryptocurrencies "have no value."
On the same day, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), criticized the collapse of Luna and TerraUSD (UST), calling the issuance structures of the two coins a "pyramid" unsupported by assets.
Georgieva said, "There has been great turmoil in the stablecoin sector," adding, "Stablecoins are stable at a 1:1 ratio against the dollar if backed by assets, but if they are not backed by assets and promise a 20% return, that is a pyramid scheme." She also warned, "What happens in a pyramid scheme? Eventually, it shatters and collapses."
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