Guggenheim CIO Calls Crypto 'Tulipmania' After Predicting Bitcoin Will Hit $600,000

Guggenheim’s Chief Investment Officer turned bearish on cryptocurrency after Bitcoin’s drop to $30,000 on Wednesday.

What Happened: Scott Minerd, chief investment officer at Guggenheim Partners, seemingly reversed his stance on crypto after Wednesday’s selloff as he took to Twitter to state that it has proven to be “Tulipmania.”

Crypto has proven to be Tulipmania. As prices rise, tulip bulbs and #crypto currencies multiply until supply swamps demand at previous market clearing prices.

— Scott Minerd (@ScottMinerd) May 19, 2021

Minerd’s comments attracted a fair amount of criticism from the crypto community, with most people calling into question whether Guggenheim had done its research before announcing plans to invest “hundreds of millions” into Bitcoin (CRYPTO: BTC).

“Scott is dead wrong, bordering on financial malpractice. The supply of cryptocurrencies (Bitcoin) and crypto assets ($ETH, $COMP, etc) does not increase as a function of price. That's like saying the supply of stocks increases, as demand does. Lousy look for Guggenheim Partners,” said Robert Leshner, CEO of Compound Finance.

Why It Matters: Earlier this year, Minerd told CNN’s Julia Chatterley that Bitcoin could go as high as $600,000.

"Cryptocurrency has come into the realm of respectability & will continue to become more and more important in the global economy," he said at the time.

Then, in April, he told CNBC that he expected a “major correction” to hit soon but described a potential pullback to $20,000 or $30,000 as a normal evolution in what is a longer term bull market.

See also: China Cryptocurrency Warning Fears Leads To Extended Crypto Selloff

According to an SEC filing from November, 2020, the Guggenheim Macro Opportunities Fund (MUTF: GIOCX) disclosed that it might seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (OTCMKTS: GBTC).