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Scott Minerd, CIO of Guggenheim Partners. Source: A video screenshot, Youtube/ Bloomberg Markets and Finance

The major investment firm Guggenheim Partners says the crypto industry will see more companies collapse as central banks decisively end the era of “easy money.”

Speaking with Bloomberg ahead of the Federal Reserve’s interest rate announcement on Wednesday, Guggenheim Partners Chief Investment Officer (CIO) Scott Minerd called the crypto industry a “crazy” thing that came out of the period of easy money. But now that the period has ended, the industry will face an uphill battle, he said.

“There’s another shoe to drop – I can’t tell you where it is. 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 said in the interview.

This week’s comments from Minerd follow comments from May this year when he predicted Bitcoin (BTC) would fall to $8,000. However, he still believed that the crypto ecosystem would get through the downturn – a belief he still holds today.

“A year ago, we were talking about crypto, and there were approximately 19,000 coins. There is going to be a washout just like the Internet bubble,” he said in the Bloomberg interview this week.

The Guggenheim CIO added that he sees the crypto sector as still in its infancy and said more regulations are needed.

“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.”

Guggenheim Partners has been known as proactive in embracing crypto. In June 2021, the firm unveiled plans to launch a new fund that may seek investment exposure to cryptocurrencies, with an emphasis on bitcoin.

Additionally, the Guggenheim Macro Opportunities Fund, one of Guggenheim’s many funds, has in the past said it reserves the right to allocate up to 10% of its net assets to Bitcoin.

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