Jeffrey Gundlach, the CEO of DoubleLine Capital and so-called “Bond King,” warned that the primary cryptocurrency could be in a massive bubble. He based his view on BTC’s recent performance that included a parabolic increase and a large crash just yesterday.
The Bond King Sees BTC As A Bubble
It’s safe to say that bitcoin initiated a significant bull run in early October when it dabbled with the $10,000 price tag. In the following months, BTC more than quadrupled its value to an all-time high of $42,000 marked last week. However, the asset was not exempt from adverse developments either and yesterday crashed by nearly $12,000 in less than 24 hours.
Such a parabolic price increase followed by a massive correction has raised concerns among some traditional investors, including DoubleLine Capital’s CEO Jeffrey Gundlach.
He warned that similar developments could indicate that the asset has become a bubble, and people need to be wary before allocating any funds to it.
“I don’t like bitcoin here. I don’t like things that are up on a stilt like that. Bitcoin, to me, is now sort of in bubble territory in terms of the way it’s been acting.”
The Bond King is not the only one who recently asserted that BTC is in a bubble. CryptoPotato reported a similar narrative breached by a former Merrill Lynch economist – David Rosenberg. He compared the 2020/2021 run with the developments during the 2017/2018 rally and warned that bitcoin could enter a bear market as it happened three years ago.
Bill Miller Disagrees
On the contrary, the US fund manager and philanthropist Bill Miller, who predicted the mentioned above bull run as early as October, said that the cryptocurrency gets less risky the higher its price goes.
“Bitcoin is a supply-demand story. There are 900 new bitcoins created every day. Bitcoin’s total supply is growing less than 2% a year, and it’s obvious by the price that the demand is growing much, much faster than that.”
Consequently, he concluded that as long as this narrative persists, BTC is “likely to go higher, perhaps considerably higher.”
Just recently, Miller also predicted that corporate funds could start a “torrent” towards the cryptocurrency and said that BTC is a “rat poison for cash.”