Jeff Gundlach, the billionaire investor and CEO of DoubleLine Capital, widely known as the “Bond King,” has stated that the Bitcoin chart looks scary and its values may drop significantly.
Inflation in the United States is horrible, according to Jeff Gundlach, and trade and budget deficits are smaller than they’ve ever been, especially post-pandemic.
He added that while the price of the dollar may not collapse tomorrow, it will most certainly fall sooner or later based on its current position.
“Ultimately, the size of our deficits — both trade deficit, which has exploded post-pandemic, and the budget deficit, which is, obviously, completely off the charts — suggest that in the intermediate-term — I don’t think this year, exactly, but in the intermediate term — the dollar is going to fall pretty substantially,” Gundlach told CNBC. “That’s going to be a very important dynamic, because one of the things that are helped the bond market, without any doubt, has been foreign buying, with the interest rate differentials having favoured hedged U.S. bond positions for foreign bond investors,” he added.
Gundlach stated that the currency has remained strong until this point. Even when the US currency was trading below 89 cents, America announced a solid short-term performance.
The dollar’s value, on the other hand, is steadily declining. He predicted the dollar’s slow demise if it continues to plummet at its current rate.
“In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger…In the longer term, I think the dollar … [is] doomed,” Gundlach said.
After dooming the USD, Gundlach turned his attention to Bitcoin. Bitcoin, he claimed, is nothing more than a trading vehicle. Being short or long on bitcoin means the investor is treading water in treacherous territory.
Gundlach believes that the Bitcoin market is too volatile to invest in and that even for members of the crypto community, now is not the best moment to hold Bitcoin.
Gundlach believes that prices will continue to fall and that BTC will become much more affordable.
“The chart on bitcoin looks pretty scary….I have a feeling you’re going to be able to buy it below 23,000 again. Bitcoin has lost its steam.”