Jeffrey Gundlach, nicknamed the bond king, shared his opinion on when to buy cryptocurrencies. While emphasizing the Fed’s interest rate policies, he also warned of the increasing risk of deflation. It was one of his remarkable predictions that it was time to fall in the stock market.
How logical is it to buy cryptocurrencies amid rate hikes and economic contraction?
Jeffrey Gundlach, founder and CEO of investment management firm Doubleline, shared his views on the US economy, stock and bond markets, and when to buy crypto this week. His remarks came from an interview with CNBC on Tuesday. The billionaire says the Fed is likely to raise interest rates further. Therefore, he explained that it is too early to jump into the crypto market. Gundlach commented on how good the current market conditions are for buying cryptocurrencies:
I certainly wouldn’t be a buyer today.
Gundlach further emphasized that the time to return to the crypto market is linked to the Federal Reserve’s interest rate determination. He said the opportunity would come when the central bank began its “free money” policies. Referring to the Federal Reserve’s hawkish stance and recession fears, Gundlach emphasizes:
I guess you buy crypto when they make free money again… You need a real Fed pivot.
He added that investors should not buy crypto when a monetary policy axis has only “dreams.”
The pessimistic picture is only for cryptocurrencies?
As we reported on Kriptokoin.com, the World Bank warned of a possible global recession in 2023. In its press release on September 15, the bank said that the current rate of increase and policy decisions are not enough. The reference point for interest rates was pre-pandemic levels. The World Bank says inflation is unlikely to return to this period.
Ray Dalio, billionaire founder of Bridgewater Associates, said in a September 13 blog post that if U.S. interest rates rose to about 4.5%, it would “have a negative impact on stock prices by about 20 percent.” The stock and cryptocurrency market showed high correlation in 2022. Therefore, the situation does not bode well for either of them, according to Ray Dalio.
Macroeconomic developments are worrying investors, who sent 236,000 Bitcoins to major exchanges on Sept. 14, according to Glassnode data. Entry was at its highest since March 2020. Jeffrey Gundlach, on the other hand, echoes Tesla CEO Elon Musk’s recent statement by Ark Invest CEO Cathie Wood that “Leading inflation indicators like gold and copper point to the risk of deflation,” warning that a large Fed rate hike could lead to deflation. .
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