Guggenheim Partners' chief investment officer Scott Minerd has raised his prediction for Bitcoin's price to $600,000.
"If you consider the supply of bitcoin relative, let's say, to the supply of gold in the world, and what the total value of gold is, if bitcoin were to go to those kinds of numbers, you would be talking about $400,000 to $600,000 per bitcoin," he said. "That gives you a lot of room to run."
Minerd previously said his firm's fundamental analysis pegged Bitcoin's potential price at $400,000. Guggenheim Partners has $246 billion under management.
Minerd also revealed that Guggenheim first started analyzing Bitcoin a decade ago, but concluded that the market for the cryptocurrency was too small for investment firms to participate. That changed when Bitcoin's price hit $10,000.
"As the total market cap of Bitcoin got bigger, around $10,000, it started to look very interesting," he said. Bitcoin first hit that price level in June 2019, giving it a market capitalization — or the value of all bitcoin in circulation — of about $200 million.
Minerd made his remarks in an interview with CNN's Julia Chatterley on Feb. 2. Minerd said that Tesla founder Elon Musk's recent comments in support of Bitcoin suggests the cryptocurrency is continuing to gain mainstream adoption globally.
"Elon has definitely proven himself to be a visionary and I think cryptocurrency has come into the realm of respectability and will become more and more important in the global economy," he said.
But Minerd also sounded a note of caution on bullish forecasts for the price of Bitcoin. He called Bitcoin's rally in the last month "massive short-term speculation" and he warned that although his analysis suggested Bitcoin could be worth as much as $600,000, there was no guarantee it would ultimately rise to those heights.
Perhaps most relevant to Bitcoin bulls, Minerd repeated his view that institutional buyers of the cryptocurrency weren't entering the market in large enough numbers to justify the current price.
"I don't really see the institutional support today, which is just coming online from the likes of people like Blackrock and Guggenheim and other large institutional investors, being big enough to support the valuation at its current levels," he said.
Yet institutional interest continues to bubble to the surface. The California public pension fund CalPERS, the largest such fund in the U.S., increased its stake in the listed mining firm Riot Blockchain by $1.9 million last quarter, CoinDesk reported yesterday.