In an interview with CNBC on June 16, Jeff Gundlach, co-founder of mutual fund company, DoubleLine Capital, talked about the recent crypto market crash and the Federal Reserve rate hike’s effect on the crypto market. The billionaire investor Gundlach pointed to recent “blow-ups” in the crypto sector as the catalyst for the second crypto market meltdown this year.
“We’ve already seen around the edges some blowups in parts of the crypto world, and that could be foreshadowing some problems.”
Billionaire investor Jeff Gundlach warned that he won’t be surprised if Bitcoin falls below $10,000. Following a succession of “blow-ups” that have raised concerns about the stability of crypto markets.
Appaloosa Management's David Tepper tells @ScottWapnerCNBC Powell "left himself optionality" by leaving a 75bps on the table for the Fed's next meeting.@DLineCap @TruthGundlach on where he thinks the Fed's credibility issue lies: pic.twitter.com/ca6iWB60jo
— CNBCOvertime (@CNBCOvertime) June 15, 2022
Bitcoin, the world’s largest cryptocurrency, has dropped to 18-month lows and threatened to break below $20,000 this week. However, after the Federal Reserve raised the benchmark interest rate by 75 basis points, crypto markets saw a slight improvement. Gundlach told CNBC in a “Closing Bell” interview on June 15, referring to the $30,000 and $20,000 levels:
“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.”
The price collapse of terraUSD in May shattered investors’ confidence in the crypto industry’s stability. The Terra collapse added pressure on bitcoin and the whole crypto market. Recently, renowned crypto lending firm Celsius Network also halted all withdrawals and transfer activities among its users, citing “extreme market conditions and volatility.” The suspension has raised fears among Celsius users that the firm is on the verge of bankruptcy, as evidenced by the company’s reported move to seek restructuring lawyers to assist with its escalating financial problems.