The institutional demand that drove the price of bitcoin to new all-time highs this month isn’t enough to support the price now, which is currently floating between $30,000 and $32,000, according to Guggenheim Partners CIO Scott Minerd.
“The reality of the institutional demand that would support a $35,000 price – or even a $30,000 price – is just not there,” Minerd said Wednesday on Bloomberg Television.
“The viability of bitcoin in the long run is still as an asset class is still very likely,” he added, “but I don’t think the investor base is big enough and deep enough right now to support this kind of valuation.”
Minerd, who helps manage $310 billion in assets, declared last month that bitcoin could eventually be worth $400,000. The price rallied to nearly $42,000 earlier this month before pulling back. Last week, he warned bitcoin could retrace to $20,000.
Meanwhile, Grayscale Investments filed to register five new trusts Thursday morning, three of which are connected to decentralized finance (DeFi) applications: Aave, a protocol that enables flash loans; Cosmos, a decentralized network of independent parallel blockchains; and Polkadot, network protocol that connects multiple blockchains into one network.
U.S. corporations have record amounts of idle cash on their books with near zero percent interest rates. Industry observers believe placing that cash into DeFi protocols could generate significantly more interest.
DeFi tokens have rallied to record highs this week. The overall total value locked for DeFi is now at about $26 billion, up from $24 billion a week ago.