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Jeffrey Gundlach, the CEO of DoubleLine Capital, which manages over $ 200 billion in assets, has a tip for speculators – the price of bitcoins could rise to $ 5,000.
According to CNBC, the Wall Street veteran who earned the nickname "Bond King" for his experience in bond investment, made the call in a webcast entitled "Just Markets":
I do not recommend anything with bitcoins, really … but if you really want to speculate, I think it could go up to $ 5,000. It's an easy 25 percent.
Take a dip before an increase?
While Gundlach did not offer a timetable for when this would materialize, the price of bitcoin has already fallen by more than 7% since it touched a monthly high of around US $ 4,200 on January 8. Currently, the cryptocurrency is trading below $ 3,800 having already tested a US $ 3,776 (Bitstamp) low.
For the other asset classes, Gundlach said that volatility will increase in 2019. According to Gundlach, the shares will get hurt due to higher bond yields, while the Federal Reserve's tightening agenda imposes itself.
Gundlach also called on investors to clear junk bonds, raising concerns over the rise in corporate and government debt in the United States:
Use the force we saw in the junk titles as a gift and get out of them. Investors must enter a sound budget … to survive the zigzag of 2019.
Too much leverage?
According to data from Goldman Sachs' chart included in the link king's webcast, US federal debt as a percentage of GDP now exceeds household debt as a percentage of GDP. The corporate debt of the United States in relation to GDP is now at a record level although it is still lower than the debt of US households as a percentage of gross domestic product.
While so far there have been many market forecasts for the coming year, what makes the bond king's expectations regarding bitcoins and traditional assets worth noting is its accuracy, if its prediction for 2018 is something to do.
According to ZeroHedge, some of the Gundlach 2018 forecasts that have come to fruition include the massive sell-off of US equities that saw the S & P 500 fall sharply on December 24th. However, the index appreciated by 2% from the beginning of the year.
Shutterstock foreground image.
