Bitcoin should be worth $400,000 based on its scarcity and value relative to gold, Guggenheim’s Scott Minerd told Bloomberg on Wednesday.
The digital asset rose 6%, to around $22,497, as of 8.22 a.m. GMT on Thursday, bringing its year-to-date return to just over 200%. Bitcoin rose above the $20,000 level for the first time in history only a day ago, meaning that its price gained 12% in two days.
The supply of bitcoin is limited to 21 million, giving it its anti-inflationary trademark. The token’s scarcity together with the Federal Reserve’s “rampant money printing” suggest its price should rise to $400,000, Minerd told Bloomberg.
“Our fundamental work shows that bitcoin should be worth about $400,000,” he said on Bloomberg Television. “It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP.”
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.
