DoubleLine Capital CEO Jeffrey Gundlach said parts of the crypto world are blowing up and bitcoin could fall further to $10,000. “When it broke below $30(k), it looked on chart basis $20(k) was going to happen quickly, and it did. The trend in crypto is clearly not positive,” Gundlach said in an interview with Scott Wapner on CNBC. “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 sell-off in cryptocurrencies deepened on Wednesday, with bitcoin sinking very close to the key level of $20,000. The world’s largest digital currency has plunged nearly 70% since the peak of the crypto craze in November 2021. “We’ve already seen around the edges some blowups in parts of the crypto world, and that could be foreshadowing some problems,” Gundlach said. On inflation, the so-called “bond king” said he believes prices will stay elevated at current levels even as the Federal Reserve continues to hike interest rates. The “inflation rate is so high and this idea that it’s about to come down to anything close to the 2% level is completely out of the cards,” Gundlach said. Inflation accelerated further in May, with prices rising 8.6% from a year ago, the fastest increase since December 1981. Economists polled by Dow Jones expected a gain of 8.3%. DoubleLine’s financial models expect year-over-year inflation to stay above 8% “for a couple more months; Maybe even printing a little higher based on the fact that commodity prices got even more elevated, particularly energy.” Gundlach added that inflation in the service industry could get worse in the months ahead because there’s so much pent-up demand for travel, leisure and hospitality.
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