Billionaire Jeff Gundlach Talks Desirability of Buying Cryptocurrencies, Also Warns of Risk of Deflation

Billionaire Jeffrey Gundlach, aka “king of bonds“, gave his opinion on when to buy cryptocurrencies.”You need a real Fed pivotGundlach also warned of the growing risk of deflation, noting that it’s time to be bearish in the stock market.

Jeffrey Gundlach talks about Fed rate hikes, the US economy and whether or not to buy cryptocurrencies.

Founder and CEO of investment management firm Doubleline, Jeffrey Gundlach, shared his view this week on the US economy, stock and bond markets, and when to buy cryptocurrencies. Doubleline, based in Tampa, Florida, has more than $107 billion in assets under management (AUM) as of June 30.

In an interview given to US broadcaster CNBC on the sidelines of the conference Future proof On Tuesday, the billionaire explained that it is too early to jump on the crypto train as the Federal Reserve is likely to raise interest rates further.

Commenting on whether now is a good time to buy cryptocurrency in the current market conditions, Gundlach opined:

I certainly wouldn’t be a buyer today.

Jeffrey Gundlach is sometimes known as the King of Bonds after appearing on the cover of Barron’s in 2011 as “the new king of bonds“. Institutional Investor called it “Money Manager of the Year” in 2013 and Bloomberg Markets called it one of the “fifty most influential” in 2012, 2015 and 2016. He was initiated into the Hall of Fame for Fixed Income from FIASI in 2017. His fortune is currently around 2.2 billion.

In Tuesday’s interview, the billionaire pointed out that the time to step back into the crypto space would be when the Federal Reserve reverses rate hikes and reverses its policy of “free money“. Citing the Federal Reserve’s aggressive stance and fears of a recession, Jeffrey Gundlach noted:

I think you will buy cryptocurrencies when they start making free money again… You need a real Fed kingpin.

He added that investors should not buy crypto if only “to dreamof a linchpin of monetary policy.

Doubleline’s CEO also warned of the growing risk of deflation, seeing it as the biggest threat to the US economy and markets. He explained that it is time for investors to get more bearish on US stocks, noting that the S&P 500 could fall as much as 20% in mid-October.

Credit market action in line with weak economy and struggling stock marketJeffrey Gundlach described, specifying:

I think you need to get more bearish.

While admitting that stock selection is not his forte, he said:I still want to have shares, but I’m a little lighter“. Still, he sees emerging markets as the biggest opportunity for equity investors.

Citing the risk of deflation, he suggested that investors dive into long-term US debt securities. “Buying long-term treasurieshe advised, insisting:

The risk of deflation is much greater today than in the past two years.

Regarding the schedule, he clarified:I’m not talking about next month. I’m talking about a little later next year, certainly in 2023.

Recently, Tesla CEO Elon Musk also warned that a significant rate hike by the Fed could lead to deflation, echoing Ark Invest CEO Cathie Wood’s statement that “leading inflation indicators such as gold and copper signal the risk of deflation.

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