Tilting Ship Can't Sail! Bond King States: Dislikes Bitcoin's "Teeter-totter" Risky State

After a drop of over 20% from its peak, Jeffrey Gundlach, known as the "Bond King," stated in an interview with CNBC yesterday that Bitcoin is currently in a bubble phase, but that doesn't mean the bulls have no chance.

A Tilted Ship, Unable to Sail

DoubleLine Capital CEO Jeffrey Gundlach has made several comments related to Bitcoin in the past. In early October 2020, Jeffrey, during an interview with Real Vision CEO, mentioned that the financial markets would face challenging times in the next 18 months, with the U.S. expected to be the worst-performing market globally, and he expressed his disbelief in Bitcoin. However, by November, Jeffrey Gundlach changed his tune and stated on the Rosenberg Research program that Bitcoin might be a good hedge against inflation.

After experiencing significant surges and yesterday's sharp pullback, Jeffrey Gundlach once again made comments about Bitcoin on CNBC, stating that Bitcoin has been in a "bubble phase" since surpassing $20,000.

"To me, Bitcoin's performance now looks like it's in a bubble phase... It started to get crazier when Bitcoin reached around $23,000."

Jeffrey mentioned that last year he believed "the dollar would decline and Bitcoin would rise," but the current state of Bitcoin has become volatile, and he expressed his dislike for the current state of Bitcoin and the "stilted" situation. Jeffrey said:

"I'm not entirely a contrarian, but sometimes it seems like too many people are all standing on one side of the ship, and I don't think the ship can sail that well in that condition."

If Institutions Enter, Bulls Still Might Win

However, although Jeffrey doesn't think now is a good time to buy Bitcoin, he believes that the narrative of institutions entering the market may be accurate. Generally, institutional investors' adoption of Bitcoin is a driving force behind Bitcoin's price increase. Many, like renowned value investor Bill Miller, believe that cryptocurrencies still have room to grow.

"Bitcoin's total supply increases by less than 2% annually, and the growth in demand compared to supply can be seen clearly in the price. As long as this can be sustained, Bitcoin could rise to higher levels."

Jeffrey acknowledges that the Bitcoin bulls may prove to be right.

"If institutional participation is a fact, then the argument based on 'supply and demand dynamics' as the theory for price increases will be correct, and this would be the reasonable cause for Bitcoin's significant surge during this period."