DoubleLine Capital CEO Jeffrey Gundlach warned on Monday that bitcoin could be overheated after its massive execution in recent months.
“I don’t like bitcoin here. I don’t like things in a pen like that,” Bond King told CNBC’s Halftime Report. “Bitcoin, to me, is now a kind of bubble territory in the way it has acted.”
Gundlach’s comments come on Monday, as the price of bitcoin dropped sharply to below $ 33,000 in digital currency. The cryptocurrency hit a record low of $ 42,000 on Friday before it began to withdraw. Bitcoin, however, is still growing by over 75% in the last month and by over 380% since April 1.
The major rally of bitcoin has come against the backdrop of the coronavirus pandemic, with governments around the world launching massive stimulus efforts to help troubled economies. This has raised inflation concerns for some investors, and bitcoin has been an asset to which they have turned.
Increased adoption of bitcoin in general by institutional investors has been another factor credited to helping propel its rise. And some people, such as value investor Bill Miller, believe that digital currency has more room to roll – while acknowledging that its volatility is likely to remain.
“Bitcoin’s total supply is growing by less than 2% a year and it’s obvious from the price that demand is growing much, much faster than that,” Miller told CNBC on Friday. “As long as this is achieved, bitcoin is likely to grow and can grow considerably.”
Gundlach acknowledged that there is potential for bitcoin bulls to be proven correct.
“People who point out that there is a terrible dynamic of supply and demand, if the institutions are really involved, they are right,” Gundlach said. “This can create these massive moves in bitcoin.”
In January 2020, Gundlach predicted a short-term increase for bitcoin, potentially up to $ 15,000 per coin per year.
The investor had a more negative view in other cases. For example, in December 2017, Gundlach said, “If you shorten bitcoin today, you will make money.” At the time, bitcoin was trading over $ 16,000 a coin. It would continue to decline dramatically, losing well over half of its value by December 2018.
Gundlach, explaining his current position on bitcoin, said on Monday that he was worried that investors had become too optimistic.
“I think all this stuff is kind of ripe now, and the commercial location is weak,” he said. “Even the dollar, I was very negative against the dollar in January 2017, but in fact we became neutral against the dollar a little lower than when we are now … just because these things seem to have arrived and they delve into the narrative of consensus. “
“There are times when … people seem to be so much on one side of the boat that I really don’t think the boat can sell so well,” Gundlach added, “and I think there’s bitcoin on the bullish side even now.”