The limited supply of bitcoin may drive up its value for the time being, but also makes it an unlikely substitute for gold or currencies in times of financial distress, according to Bill Gross, the billionaire bond manager with Janus Henderson Group Plc..
“It isn’t really a currency alternative right now,” Gross said Thursday in an interview with Bloomberg Television. “Purchasing a bag of groceries at the supermarket will be somewhat difficult.”
Just 21 million bitcoins can be minted under the terms of the digital money, which saw its price spike to nearly $20,000 on Thursday. The cryptocurrency’s high volatility can also be a deterrent to its wide use as a store of value, according to Gross, who runs the $2.2 billion Janus Henderson Global Unconstrained Bond Fund.
Bitcoin’s value was inflated together with other resources as a consequence of international central bank policies to decrease interest rates, Gross said. Those movements have pushed up investor appetites for riskier assets in the search for higher yields.
Investors are taking a look at bitcoin “as a mania that is satisfying an upward and upward price movement,” he said.