Scott Minerd, Global CIO of the investment firm Guggenheim Partners, tweeted his thoughts on the crypto crash, portending a similar fate for the stock market. “Crypto told us ahead of time that #stocks were going to be in trouble.”
He further stated that until the crypto bottoms, there will be no relief for any other asset class. Minerd states, “Crypto has proven not to be a diversifying asset class, or a safe haven. It is a high beta play on risk.”
While very few agreed with Minerd’s thesis, Carl Quintanilla of CNBC fame replied with a similar story they had shared in mid-May. “We found a use for #Bitcoin… as a signal for when stocks will bottom,” Quintanilla replied to Minerd’s tweet.
Meanwhile, a few crypto lovers bashed the tweet and argued that crypto’s crash had nothing to do with the stock market’s tumble.
Nonetheless, a majority of people stated that crypto is not a real asset, just a price, and thus cannot be trusted for anything. Stocks, on the other hand, have fundamentals, earnings, and business performance that foretell their future trajectory.
On the Federal Reserve’s stance of bringing down the inflation rate to 2%, Minerd believes that the economy will inevitably have to undergo financial duress to reach that state. Minerd reminded, “The US has never had #inflation come down by more than two percentage points in a year without a #recession.”
He even stated that the firm’s internal models are currently inclined towards holding bonds over owning stocks.
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