Last week, Scott Minerd, Global Chief Investment Officer of Guggenheim Partners and the Chairman of Guggenheim Investments, the man who said last December that “Bitcoin should be worth about $400,000”, shared his latest thoughts on Bitcoin.
Guggenheim Investments is “the global asset management and investment advisory division of Guggenheim Partners and has more than $233 billion in total assets across fixed income, equity and alternative strategies.” It focuses on “the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, wealth managers and high net worth investors.”
On 16 December 2020, after the Bitcoin price had finally broken through the $20,000 level on all crypto exchanges to set a new all-time high, Minerd, the Guggenheim CIO, talked about Bitcoin during an interview on Bloomberg TV.
The interview started by the Guggenheim CIO being asked by Scartlet Fu, Bloomberg TV’s Senior Editor of the Markets Desk, about the Guggenheim Macro Opportunities Fund and the decision by its managers to invest “up to 10% of its net asset value in Grayscale Bitcoin Trust.” In particular, he was asked if Guggenheim had started buying Bitcoin yet and how much this decision was “tied to the Fed’s extraordinary policy.”
“To answer the second question, Scarlett, clearly Bitcoin and our interest in Bitcoin is tied to Fed policy and the rampant money printing that’s going on. In terms of our mutual fund, you know, we are not yet effective with the SEC. So, you know, we’re still waiting.
“Of course, we made the decision to start allocating toward Bitcoin when Bitcoin was at $10,000. It’s a little more challenging with the current price closer to $20,000. Amazing, you know, over a very short period of time, how big run-up we’ve had, but having said that, our fundamental work shows that Bitcoin should be worth about $400,000. So even if we had the ability to do so today, we’re going to monitor the market and see how trading goes, what evaluation that ultimately we have to buy it.”
He then explained how his firm came up with the $400K valuation for Bitcoin:
“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.“