DoubleLine Capital CEO Jeffrey Gundlach on Monday warned that bitcoin could become overheated after its massive run in recent months.
“I don’t like bitcoin here. I don’t like things that are up on stilt like that,” the Bond King called CNBC’s “Halftime Report.” “Bitcoin, for me, is now a bit of a bubble field in terms of the way it has worked.”
Gundlach’s comments on Monday come as the price of bitcoin was suddenly down to less than $ 33,000 per digital coin. The cryptocurrency on Friday hit a high of nearly $ 42,000 before starting to pull back. Bitcoin, however, is still up more than 75% in the last month and over 380% since April 1st.
The massive accumulation in bitcoin has come against the backdrop of coronavirus pandemic, with governments around the world unleashing massive stimulus efforts to help sick economies. That has raised inflation concerns for some investors, and bitcoin has become the only asset to which they have turned.
Increasing acceptance of bitcoin in general by institutional investors has been another reason to help it soar. And some people, like the obvious value investor Bill Miller, think the digital coin has more room to run – although they admit it is volatile it is likely to stay.
“Total Bitcoin supply is growing at less than 2% per year and it is clear from the price that demand is growing much, much faster than that,” Miller told CNBC on Friday. and get that, bitcoin is likely to go higher and possibly much higher. “
Gundlach recognized the potential for realizing bitcoin bulls.
“The people who say it has tremendous demand-side dynamics, if institutions are very involved, they are right,” Gundlach said. “
In January 2020, Gundlach expected an upside term for bitcoin, possibly as high as $ 15,000 per coin per year.
The investor has taken a more negative view in other situations. For example, in December 2017, Gundlach said, “If you cut bitcoin today, you will make money.” At that point, bitcoin was trading above $ 16,000 per coin. It would go on to fall sharply, losing more than half its value by December 2018.
Gundlach, in explaining his current stance towards bitcoin, said Monday that he was concerned that investors have become overly optimistic.
“I think all of these things are kind of like baking right now, and the trading space is poor,” he said. “Even the dollar, I have been very negative on the dollar since January 2017 but I turned neutral to the dollar a little lower than where we are now … just because things are that’s as if they’d also gotten deep into the consensus statement. “
“There are times … there seem to be so many people on one side of the boat that I just don’t believe the boat can sell that well,” Gundlach said, “and I believe that that’s where bitcoin is on the bullish side right now. “