Gundlach on Crypto: “I Definitely Wouldn’t Be a Buyer Today” During Market Crash
DoubleLine CEO Jeffrey Gundlach on Tuesday warned against buying cryptocurrency in the current market due to the Federal Reserve’s stance in its interest rate cycle. “I definitely wouldn’t be a buyer today,” Gundlach said at the Future Proof Wealth Conference in Huntington Beach, Calif. Bitcoin price fell around 10% in the selloff that saw the Dow Jones Industrial Average drop 1,200 points for its worst loss of the year. Bitcoin prices previously topped $67,000, peaking in November 2021, thanks to the Fed’s “free money” policies, he said. The US central bank cut borrowing costs to floor rates at the start of the Covid-19 pandemic to help support the economy. Fed officials have steadily and aggressively raised interest rates since March to rein in stubbornly high inflation, and have signaled they will continue to do so until inflation numbers improve. Bitcoin prices fell from around $5,000 in March 2020 to a high of over $67,000 in November 2021. They have since plunged to just over $20,000. “I think you buy crypto when they release money again,” Gundlach said of the Fed’s response to a future US recession. “You need a real Fed pivot,” not the “dreams” of a political pivot, Gundlach said. Following the CPI report, traders in the fed funds futures market have fully priced in an interest rate hike of 0.75 percentage points at the Fed meeting next week. They also indicated a 32% chance for a full one percentage point increase, something the Fed has never done since it began using the funds rate as its main monetary policy tool in the early 2000s. 1990s.
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