GUNDLACH ON BITCOIN: 'I'm going to let this mania go on without me'

Screen Shot 2017 09 13 at 11.09.04 AM Markets Insider

Just about everyone has questions about bitcoin these days, including Jeffrey Gundlach’s 86-year-old mom. 

Gundlach, DoubleLine Capital’s founder, said she texted with a  link to a story urging readers to buy bitcoin. She wanted to know whether she should get in the game. 

But the cryptocurrency is not something that Gundlach himself is ready to participate in. 

“I’m going to let this mania go on without me,” Gundlach said during a webcast with clients on Tuesday. He did devote the first slide in his section on Fed policy to a bitcoin price chart.

“I philosophically don’t believe it’s unhackable,” he said, adding that he’s received pushback from “smart 20-somethings.”

Bitcoin was near $4,500 per dollar when Gundlach got the text from his mom. It crossed the $5,000 mark briefly, but has since rolled back, to about $3,765 on Wednesday.

“So, I’m sure she’s not interested in buying it now that it’s falling,” Gundlach said. He added that he didn’t have a price target on bitcoin.

Although bitcoin could run into regulatory hurdles in key markets like China, where domestic exchanges reportedly risk being closed, some investors are betting that it will only get more popular. Tom Lee, the co-founder of Fundstrat, forecasts that bitcoin could hit $6,000 by mid-2018.

Not everyone agrees, including Mohamed El-Erian, Allianz’s chief economic adviser. He told CNBC on Wednesday that he didn’t think governments would allow the massive adoption that traders have priced in. Bitcoin should be worth “at least half” of its current price, he said.   

Gundlach spoke a few hours after Jamie Dimon, JPMorgan’s CEO, said he would fire any trader who was transacting bitcoin. Bitcoin is “worse than tulip bulbs,” Dimon said, referring to the infamous speculative market for tulips in 17th-century Europe.   

“It’s interesting that somebody that high-profile is out there with such an interesting statement,” Gundlach said about Dimon. 

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