A notorious Wall Street investor declared recently that bitcoin could be the new indicator for general stock markets. His affirmation was made in relation with the recent fall in stocks and high-yield bonds which occurred at the same time as bitcoin’s dip.
In an interview for Reuters, Jeffrey Gundlach, the founder of Double Line Capital, and influential investor on Wall Street made the following remark:
Bitcoin’s closing price fell to this year’s low last week, and the S&P 500 index was also at this year’s lowest level this week.
While Gundlach has been emphasizing this idea for several months now, this time he made sure that he is heard. According to Reuters, since bitcoin started to break into the mainstream, the investment experts who are managing accounts worth $119 billion have labeled the cryptocurrency as the number one risky asset.
Gundlach predicted in the past that when bitcoin will perform poorly so will the stocks and high-yield bonds. The confirmation for his prediction came in January when the whole crypto market took a huge hit followed by the traditional markets.
He also declared that December 2017 was the month when bitcoin became“a synonym for speculative sentiment”. But on the other hand, he claims that the market is much calmer now. He hinted that the “speculative sentiment” has been depleted since December and things are going at a healthy pace now.
While this time Gundlach’s views were neutral towards the cryptomarket and bitcoin, he stated in January:
The value of Bitcoin is high, but it is unconfirmed. What I think is Bitcoin is totally different from people’s thinking. People think this is very safe and anonymous, and cannot be hacked and so on. My opinion is just the opposite.
When he was asked if he has invested in bitcoin or if he would do it in the future, Gundlach declared that the crypto market is not compatible with his conservative points of view. An argument that is often made by all the traditional investors.