Cryptocurrencies reportedly suffers from tulip syndrome
May 23, 2021 7:26 PM
The crack in the cryptocurrency market illustrates "Tulipmania" according to the CIO of Guggenheim, a former promoter of $ 600,000 Bitcoin.
Scott Minerd definitely doesn't know where to turn. The radical reversals of the director of investments at institutional Guggenheim are beginning to be known in the cryptocurrency world.
After ensuring, on the basis of "fundamental research", that Bitcoin would reach $ 600,000, the CIO adopts a new positioning. And this one is in fundamental rupture, too, with its previous positions.
The bubble burst, but the crypto remains
Scott Minerd is now talking about a cryptocurrency bubble - and therefore its explosion. “The crypto turned out to be Tulipmania. As prices rise, tulip bulbs and #cryptocurrencies multiply until supply overwhelms demand, ”he writes.
The investor is making a historical reference here. He compares the crack of the cryptocurrency market to the first financial and speculative disaster, namely that of the tulips in Holland. Flower prices rose to a hefty price tag… before collapsing.
This comparison has earned Minerd a number of criticisms on social networks and among market professionals. For the founder of Compound Finance, Robert Leshner, this comment would almost amount to professional misconduct.
“Scott has it all wrong, bordering on financial malpractice. The supply of cryptocurrencies (#Bitcoin) and crypto assets ($ ETH, $ COMP, etc.) does not increase with price. It’s like saying that the supply of stocks increases because demand increases, ”he grows angry.
Bitcoin Tulip Price Rises
But for Guggenheim's chief investment officer, there's no mistaking it. He assures him, the crypto market is not about to disappear. The bubble burst, as he predicted several times already this year - without this prediction being confirmed.
"It's not the death of #crypto just like the collapse of Tulipmania didn't mean the end of tulip bulbs! Says Scott Minerd. The expert has already, on several occasions, seen his predictions being contradicted.
In April, in particular, the financier wielded the threat of a real plunge in the value of BTC. According to Minerd, the price of the crypto-asset risked being halved following a sharp correction. This event will not take place.
Finally, it will be necessary to wait for the intervention of Elon Musk and Tesla to trigger a strong correction in crypto-assets. And the decline was further accentuated by the panic of new investors. After falling to $ 36,700, Bitcoin is returning to growth, however. Its price is back to $ 40K.