Jeffery Gundlach, who is an American investor and the co-founder DoubleLine Capital — an investment company with over $150 billion in assets under management — prefers holding the bellwether cryptocurrency to gold in the short term.
Gundlach, who was speaking to CNBC, noted that bitcoin is presently trading close to the low end of its range. After a flat week for the cryptocurrency market, the price of BTC popped above the $41,000 mark yesterday after the Federal Reserve raised its benchmark interest rate by a quarter-percentage point. This was the first interest rate hike since December 2018.
Commenting on this, the “Bond King” observed that the Fed’s policy decision on Wednesday was in line with the two-year treasury, though it was lagging behind a bit.
Gundlach further indicated that stocks are currently in the oversold zone and are he expects an upsurge in the immediate term. The growing correlation between bitcoin and equities, he argues, could benefit cryptocurrencies.
Bitcoin has long been viewed as “digital gold”, with crypto evangelists saying it acts as a very good hedge against uncertainty — just like the precious metal. But the top crypto has been moving in tandem with stocks in recent months.
The endorsement by the DoubleLine CEO comes on the back of bitcoin’s dizzying rise to $69,000 in November last year. BTC’s parabolic rally has seen the crypto-asset offering investors a higher return than gold.
Notably, bitcoin’s upsurge has been largely boosted by publicly traded companies (like MicroStrategy and Tesla) as well sovereign states (read: El Salvador, Ukraine), which have embraced the OG cryptocurrency in the past months.
Enthusiasts expect more corporates and countries to soon follow suit. But despite its proselytized advantages, BTC has been trading in the $39K-$44K range since the beginning of the year, owing to inflation concerns and Russia’s ongoing invasion of Ukraine.
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