Guggenheim’s Minerd Warns of ‘Another Shoe to Drop’ in FTX Fallout

(Bloomberg) — Guggenheim Partners Chief Investment Officer Scott Minerd is warning investors there will be more shakeouts to come following the collapse of crypto exchange FTX as years of easy money end.

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“There’s another shoe to drop – I can’t tell you where it is,” Minerd said during a Bloomberg Television interview ahead of Wednesday’s rate decision from the Federal Reserve. “The reason is this is just like any number of periods where we had easy money and a lot of speculation; the weakest players fall first. Crypto was obviously something that is crazy.”

Minerd, who in May predicted Bitcoin would fall to $8,000, said he has confidence the crypto system will move forward despite the recent collapse of prices and high-profile firms.

“A year ago we were talking about crypto, and there were approximately 19,000 coins,” he said, “there is going to be wash out just like the Internet bubble.”

“We will have survivors – the digitization of currency is just in its infancy and how this evolves now is going to require a regulatory framework to legitimize it,” he added.

Bitcoin spiked above $18,000 Wednesday for the first time since FTX’s bankruptcy, though it fell to $17,844 after the Federal Reserve raised its benchmark rate by 50 basis points to a 4.25% to 4.5% target range.

Minerd also predicted the Fed’s restrictive monetary policy will drive a roughly 2% rise in unemployment over the next two years.

–With assistance from Tom Keene.