New Bond King Gundlach: Bitcoin is already in a bubble

Jeffrey Gundlach, CEO of DoubleLine Capital and known as the "new bond king," warned on Monday that Bitcoin may have become overheated after its crazy rise in recent months.

“I don’t like bitcoin right now. I don’t like this thing that’s on stilts,” Gundlach said. “In my opinion, bitcoin is a little bit in bubble territory right now in terms of how it’s performing.”

Bitcoin's sharp rise comes amid the coronavirus pandemic, with governments around the world rolling out massive stimulus measures to help struggling economies. This has heightened some investors' concerns about inflation and prompted them to turn to assets like Bitcoin. More institutional investors are beginning to embrace Bitcoin, which is seen as another factor driving its appreciation.

Gundlach acknowledged that there is a chance that bitcoin bulls could be proven right. “Some people point out that it has very good supply and demand dynamics, and if institutions do get involved, they’re right,” he said. “That’s what’s going to cause a big move higher in the price of bitcoin.”

In January 2020, Gundlach predicted that Bitcoin would rise in the short term and could reach as high as $15,000 in 2020.

Explaining his current stance on Bitcoin on Monday, Gundlach said he is concerned that investors are becoming too optimistic.

“Sometimes … people seem to be on one side of the boat, and I don’t really believe the boat can sell that well,” he said. “I think the same is true with bitcoin right now.”