“That’s just not in my DNA. I have really gravitated to bonds in my career. I got shoved in there. Bonds were a necessary evil and somebody had to do it. But it turned out that it’s my culture of cowardice if you will. I am not a momentum investor at all. In fact, I am sort of an anti-momentum investor and I think bitcoin is for momentum investors just like at this point I would say the FAANGS [stocks Facebook, Apple, Amazon, Netflix, Google] are for momentum investors,” Gundlach told Yahoo Finance in an interview inside his California estate.
While Gundlach liked bitcoin at much lower prices, he is more cautious on the asset class to kick off the year.
“I think bitcoin is for speculators at the present moment. I would advise against bitcoin. I think you may get an opportunity to buy it — I think now it’s at about $45,000, so about $20,000 off the highs. Maybe you should buy it at $25,000.”
Gundlach’s hot take on crypto comes as the space has endured major selling pressure in recent months mostly as traders book profits and await the next big catalyst.
At $46,065 as of this writing, bitcoin prices have tanked 33% from their highs of $69,000 or so in early November 2021. The crypto sell-off has extended to shares of companies with outsized exposure to the space, too.
Coinbase and Robinhood shares are down 7% and 20%, respectively, in the past month, according to Yahoo Finance Plus data. Block’s stock (formerly known as Square) is down 15% in the past month.
Gundlach served up a dose of investing wisdom to those trading momentum in bitcoin (and the aforementioned FAANG stocks).
“I think it’s kind of like being a roulette wheel player [momentum investing] that somehow has a strategy that works as long as it doesn’t come up on the zero or double zero. You are making money and making money, and then eventually you get a double zero and you are busted. I think that is what happens with momentum investors. They tend to go out in a blaze of glory,” added Gundlach.