Billionaire investor Jeff Gundlach told CNBC that he wouldn’t be surprised if Bitcoin dropped to $10,000.
The “King of Bonds” noted “explosions” in crypto that helped propel bitcoin’s slide to just over $20,000.
Concerns about the financial health of hedge fund Three Arrows and lender Celsius have shaken confidence.
Billionaire investor Jeff Gundlach says he wouldn’t be surprised if Bitcoin falls further to hit $10,000, after a series of “explosions” have raised concerns about the stability of crypto markets.
The world’s largest cryptocurrency by market capitalization has fallen to trade around 18-month lows over the past five days, and threatened to break below $20,000 on Wednesday as investors worried about recent cryptocurrency events. industry and the tightening of the Federal Reserve.
“When it broke below $30, it looked like $20 on a chart was going to go by quickly, and it did. The trend in crypto is clearly not positive,” Gundlach told CNBC on Wednesday, referring to the $30,000 and $20,000 levels. .
“It looks like it’s winding down. I’m not bullish on that $20,000 or $21,000 in bitcoin. I wouldn’t be at all surprised if it hit $10,000,” he said in a “Closing Bell” interview.
Bitcoin fell to $20,378 immediately after the Fed announced its biggest interest rate hike since 1994 on Wednesday, but rallied above $21,000. It was trading at $21,693 on Thursday, up around 6% in the last 24 hours, according to data from CoinMarketCap.
The CEO of DoubleLine Capital, whose nickname is “Bond King,” pointed to recent events in the crypto world that have been spurring the cryptocurrency market’s broad rout, the second this year.
“We’ve already seen some blowouts in some parts of the crypto world, and that could herald some trouble,” Gundlach said.
The latest issue to catch the eye of investors is the uncertainty surrounding influential cryptocurrency hedge fund Three Arrows, after its CEO Su Zhu on Tuesday tweeted“We are in the process of communicating with the relevant parties and fully committed to resolving this.”
Speculation has been growing around Three Arrows, which has been steadily building a stake in Greyscale Bitcoin Trust, according to a report from Bloomberg. The hedge fund is facing possible insolvency after a $400 million spike in liquidations from lenders, The Block reported Wednesday.
The situation put further pressure on bitcoin and the broader digital asset market, already rocked by major cryptocurrency lender Celsius Network’s decision to freeze withdrawals and other account activities, citing extreme market conditions and volatility. The outage sparked concerns that Celsius was headed for insolvency, highlighted by the firm’s informed decision to hire restructuring lawyers to help advise on its mounting financial troubles.
The market was on alert after the price collapse of terraUSD and its sister token luna in May, after the Terra stablecoin lost its peg to the dollar and entered a “death spiral” that shook confidence in investors in the stability of the crypto market.
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