Billionaire investor Jeff Gundlach says it’s certainly possible for bitcoin to fall another $10,000.
Jeff Gundlach: Bitcoin Is in a Very Bad Place
At the time of writing, bitcoin – the world’s number one digital currency by market cap – has dropped to just over $20,000 per unit. The asset is trading for about 70 percent less than where it was just eight months ago (in November, it was at $68,000), and many traders are concerned about the prospects of the digital currency space.
The asset is now trading at its lowest point in about 18 months, having lost close to 25 percent over just the course of a few days. With the Federal Reserve raising interest rates another 75 points, Gundlach is convinced the situation is very bleak and likely to turn fully sour in the coming days. He commented:
When it broke below $30, it looked on a chart basis that $20 was going to happen quickly, and it did. The trend in crypto is clearly not positive. It looks like it’s being liquidated. I’m not bullish at that $20,000 or $21,000 on bitcoin. I wouldn’t be surprised at all if it went to $10,000.
As the CEO of Double Line Capital, Gundlach has earned the nickname “the Bond King.” He stated further in his interview that:
We’ve already seen around the edges some blowups in parts of the crypto world, and that could be foreshadowing some problems.
One of the biggest things that’s got everyone worried as of late is the state of Three Arrows Capital, a digital currency hedge fund. In a recent series of tweets, the company’s CEO Su Zhu stated that the company is not likely to incur any serious losses following the crash that’s occurred, and that investors need not worry.
Some are concerned about these messages and feel the firm is simply trying to cover its back and hide what may be a string of financial problems. Zhu tweeted a few weeks ago:
We are in the process of communicating with relevant parties and fully committed to working this out.
There is also heavy anxiety in the space following the crash of Terra USD and Celsius announcing a halt in withdrawals.
This Is 2018 All Over Again
Thus far, 2022 has been a pure repeat of what traders witnessed in the crypto space in 2018. At that time, bitcoin – which had hit a new all-time high of about $20,000 per unit during the months before – was incurring a series of dark losses that ultimately brought its price down into the low $3,000 range, and it took nearly half a year after that for the asset to show any serious signs of recovery.
Some investors are now worried that such recovery could take even longer than it did during that initial period given everything – not just bitcoin – is suffering heavily.
