• Bitcoin should be worth $400,000 based on its finite supply and value compared with gold, Guggenheim’s Scott Minerd told Bloomberg on Wednesday.
  • “Our fundamental work shows that bitcoin should be worth about $400,000,” he said. “It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP.”
  • His comments came on the day bitcoin crossed $20,000 for the first time.

 

 

Guggenheim Partners CIO Scott Minerd asserted on BloombergWednesday that bitcoin’s current price is well below fair value and that given its scarcity and the “rampant money printing” by the Fed, the digital token should eventually climb to about $400,000 per coin.

By the numbers: Bitcoin rose above $23,000 overnight (our data viz team made this chart at 3:40pm yesterday) bringing its 2020 gain to more than 200%.

  • Last month, Guggenheim filed to reserve the right to invest as much as 10% of its $5.3 billion Macro Opportunities Fund in the Grayscale Bitcoin Trust, which invests solely in the cryptocurrency.

What he’s saying: “Our fundamental work shows that bitcoin should be worth about $400,000,” Minerd said. “It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP. So you know, bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of transactions.”

  • Similarly, hedge fund manager Paul Tudor Jones said earlier this year he’s been buying bitcoin as a hedge against inflation after years of muted price increases.

Bulls on parade: “We have a new line in the sand and the focus shifts to the next round number of $30,000,” Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender, told Bloomberg.

  • This “is the start of a new chapter for bitcoin. It’s a narrative the media and retail crowd can properly latch onto because they’ve been noticeably absent from this rally.”

Many of bitcoin’s attributes are similar to gold, and it also has an unusual value in terms of transactions carried out, he said. Minerd’s comments echo those of an incoming Senator Cynthia Lummis who thinks bitcoin is a better store of value than paper money because of its finite supply. The Senator-elect plans to teach Congress how to use bitcoin to reduce US national debt when she assumes office in January.

Guggenheim is among the institutional players that are validating bitcoin’s legitimacy as a reserve asset. The firm last month filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust, a bitcoin-focused investment vehicle.

Three major players are holding up the massive interest around bitcoin this year. That can be pinned down to enthusiasm from institutional investors, Wall Street professionals, and retail investor participation, according to Garrick Hileman, head of research at Blockchain.com.

According to Hileman, as many as 100 million people own crypto assets.