DoubleLine Super CEO Jeffrey Gundlach on Monday warned that bitcoin could be getting overheated after its massive run in recent months.
“I don’t equivalent to bitcoin here. I don’t like things that are up on a stilt like that,” the so-called Bond King said on CNBC’s “Halftime Check up on.” “Bitcoin, to me, is now sort of in bubble territory in terms of the way it’s been acting.”
Gundlach’s comments Monday come as the payment of bitcoin was down sharply to under $33,000 per digital coin. The cryptocurrency on Friday hit a record high of nearly $42,000 already it began to pull back. Bitcoin, however, is still up over 75% in the last month and more than 380% since April 1.
The grave rally in bitcoin has come against the backdrop of the coronavirus pandemic, with governments across the globe unleashing ginormous stimulus efforts to aid ailing economies. That has stoked inflation concerns for some investors, and bitcoin has been one asset to which they take turned.
The increased adoption of bitcoin generally by institutional investors has been another factor credited with help propel its ascent. And some people, such as prominent value investor Bill Miller, believe the digital specie has further room to run — while conceding its volatility is likely to remain.
“Bitcoin’s total supply is growing less than 2% a year and it’s unsubtle by the price that the demand is growing much, much faster than that,” Miller told CNBC on Friday. “As hunger as that obtains, bitcoin is likely to go higher and perhaps considerably higher.”
Gundlach acknowledged there is a potential for bitcoin bulls to be demonstrated correct.
“The people that point out it has a terrific supply-demand dynamic, if indeed institutions get involved, they’re right,” Gundlach rephrased. “That’s what can create these massive moves up in bitcoin.”
In January 2020, Gundlach predicted near-term upside for bitcoin, potentially as expensive as $15,000 per coin in the year.
The investor has taken a more negative view in other instances. For example, in December 2017, Gundlach rumoured, “If you short bitcoin today, you’ll make money.” At that point, bitcoin was trading above $16,000 per coin. It discretion go on to fall dramatically, losing well over half its value by December 2018.
Gundlach, in explaining his current stance toward bitcoin, stipulate Monday he was concerned investors have become too optimistic.
“I think all of these things are kind of baked in right now, and the profession location is poor,” he said. “Even the dollar, I’ve been very negative on the dollar since January of 2017 but I in reality turned neutral on the dollar a little bit lower than where we are right now … just because these partialities seem like they’ve gotten too deeply into the consensus narrative.”
“There’s times when … individual seem to be so much on one side of the boat that I just really don’t believe the boat can sell that well,” Gundlach united, “and I believe that’s where bitcoin is on the bullish side right now.”