Gundlach views Bitcoin as the asset that responds to the crisis that the COVID-19 pandemic has caused. The executive did not show any sign that his firm intends to invest in the pioneering cryptocurrency.
Jeffrey Gundlach is the founder and CEO of DoubleLine Capital, an investment firm that holds more than USD 100 billion. This new gold enthusiast recently switched into the main cryptocurrency on the market as an investment.
The increase in the price of Bitcoin in recent months seems to have changed Gundlach’s viewpoint. The executive presents himself as a “bull”, that is, he is bullish about gold and bearish about the US dollar.
The investor stated on Twitter that he has remained neutral about the US fiat currency and the precious metal for over six months. He now considers that Bitcoin could become “the stimulus asset”, referring to the excessive printing of money by the US Federal Reserve (Fed).
“I am a long-term US dollar bear and gold bull, but I have been neutral about both for over six months. When too much liquidity pours into a funnel, it creates a torrent. Bitcoin may become the stimulus asset as it does not look like gold,” said the founder of DoubleLine Capital.
Traditional investors’ perspective is increasingly in line with the recent movements of large-capital institutions and firms that are investing in Bitcoin. Even though that is Gundlach’s viewpoint, he has not mentioned or suggested that DoubleLine Capital is intending to do the same.
Bitcoin vs. Gold as a Long-Term Investment
The CEO of the investment firm seems to be pointing to a vision that has been establishing itself in the world of finance. He considers that Bitcoin is “digital gold, even better than physical gold”.
In the case of hedge fund manager SkyBridge Capital, the company created a specialized Bitcoin fund at the end of last year. As if it were not enough, the firm compared the cryptocurrency with gold and considered that the technological advance has several advantages. They said that it has a public ledger (the Bitcoin blockchain) and its cryptography does not need a central entity, among others.
In recent years, Bitcoin has shown a clear advantage over gold in terms of return on investment. According to data from BuyBitcoinWorldwide, the pioneering cryptocurrency is currently at all-time highs relative to gold. At the time of writing this article, its value is higher than 29 ounces of the precious metal.
The cryptocurrency has yielded large profits since its creation twelve years ago. For that reason, it is not striking that the idea of Bitcoin as a store of value is increasingly settling in people’s minds.
Investors, speculators, and technology enthusiasts are not the only ones who see Bitcoin as a powerful store of value. Banks have also begun to view the digital currency as a potential competition to gold. However, long-time investors like Peter Schiff still do not believe in the apparent paradigm shift that Bitcoin poses.
By Alexander Salazar