Jeff Gundlach, the "Bond King": Bitcoin soared while the Shanghai Composite Index fell, this may not be a coincidence

It’s no coincidence that bitcoin has surged while the Shanghai Composite Index has fallen, said Jeffrey Gundlach, the “Bond King” and CEO of DoubleLine Capital.

Jeffrey Gundlach: Bitcoin price rise and Shanghai Composite Index decline are related

The DoubleLine Capital CEO claimed on Twitter that the surge in Bitcoin prices coincided with the decline in the Shanghai Composite Index, saying:

“Bitcoin is up 100% in the last two months. The Shanghai Composite Index is down about 10% in the same period, while most stock markets around the world are up. Maybe that’s not a coincidence.”

This time, the Shanghai Composite Index did not rise along with most global stock indices, but fell against the trend.

The Shanghai Composite Index's decline this year can be seen as a sign of increased regulation in China, with the index down nearly 10% in the past two months (it actually appears to be around 6%).

In terms of local currencies, the Shanghai Composite Index has fallen 5.65% since March 22, while Bitcoin has risen 120% in the same period.

Bitcoin in China

Bitcoin price increases have obviously been longer in the making than this one, but Bitcoin’s desire to break away from fiat currencies is why it has proven to be a better alternative.

Various signals sent by China are also very positive about the development of Bitcoin. China seems to be eager to catch up in the field of Bitcoin technology. Although currency trading pairs are restricted, the trading volume between fiat currency and Bitcoin is exploding.

Capital outflow

China has a huge overseas market, and due to the lack of senior managers in China, a lot of foreign talent has entered this market, and many of them want to bring their money back to China in a cost-effective way, and Bitcoin has become an option. Bitcoin is a good way for economic immigrants to transfer money to their families, and it also has many benefits for businesses or individuals.

Due to increased regulation, China’s major exchanges stopped Bitcoin withdrawals several months ago. The main reason is that China has realized that Bitcoin transactions may pose a risk of capital outflow (or money laundering), so it is taking necessary measures to stop it.

In my opinion, such a measure will further stabilize the digital currency and ultimately help protect not only the investments of Chinese citizens, but also the entire Bitcoin market.