Billionaire Jeff Gundlach Discusses When to Buy Cryptocurrencies and Warns of Deflation Risks

Billionaire Jeffrey Gundlach, aka Bond King, shared his view on when to buy the cryptocurrency. “You need a real Fed pivot,” he emphasized. Gundlach also warned of the growing risks of deflation, noting that it was time to take a bearish stance in the stock market.

Jeffrey Gundlach on the Federal Reserve, the US economy, and when to buy cryptocurrency
Founder and CEO of investment management firm Doubleline Jeffrey Gundlach shared his look at the US economy, stock and bond markets, and when to buy cryptocurrencies this week. Headquartered in Tampa, Florida, Doubleline has more than $107 billion in assets under management (AUM) as of June 30.

In an interview with CNBC on the sidelines of the Future Proof Conference on Tuesday, the billionaire explained that it is too early to jump on the crypto bandwagon as the Federal Reserve is likely to raise interest rates further.

Commenting on whether it is a good time to buy cryptocurrency given the current market conditions, Gundlach said: I definitely won’t be a buyer today.

Gundlach is sometimes known as the Bond King after he appeared on Barron’s cover in 2011 as “The New Bond King”. The institutional investor named him Money Manager of the Year in 2013, and Bloomberg Markets ranked him among the “50 Most Influential” in 2012, 2015 and 2016. He was inducted into the FIASI Fixed Income Hall of Fame in 2017. It is currently worth about 2.2 billion .

In an interview on Tuesday, the billionaire stressed that the time to return to the crypto space will be when the Federal Reserve turns away from price hikes and initiates “free money” policies. Citing the Fed’s hawkish stance and recession fears, Gundlach emphasized: I guess you buy cryptocurrency when they earn free money again…you need a real Fed hub.

He added that investors should not buy cryptocurrencies when there are only “dreams” about the focus of monetary policy.

The CEO of Doubleline also warned of the increasing risks of deflation, considering it the main threat to the economy and markets in the United States. He explained that it was time for investors to get more bearish on US stocks, noting that the S&P 500 could drop 20% by mid-October.

“The actions of the credit market are in line with the economic weakness and the problems of the stock market,” Gundlach said, explaining: “I think you have to start getting more bearish.

While acknowledging that stock picking is not his forte, he said, “You always want to own stocks, but I’m on the slightly lighter side.” However, he sees emerging markets as the next biggest opportunity for equity investors.

Citing deflationary risks, he suggested that investors dive into long-term US debt securities. He advised “buying long-term Treasuries,” emphasizing:

Regarding the time frame, he explained, “I won’t talk about next month. I will talk about it later next year, definitely in 2023.”

Recently, Tesla CEO Elon Musk also warned that a big Fed rate hike could lead to deflation, echoing Ark Invest CEO Cathy Wood’s statement that “leading inflation indicators like gold and copper point to the risk of deflation.”