Bitcoin bull Mark Yusko sees trouble at $60,000, calls the cryptocurrency ‘overbought’ right now

October 18, 2021: -A bitcoin bull is on pullback watch. Hedge fund manager Mark Yusko believes investors will take profits due to the cryptocurrency’s sharp rally over the previous few weeks.

“There are a lot of people that think we could hit $100,000 by the end of the year, and the stock to flow model says we should,” the Morgan Creek Capital Management CEO and CIO told CNBC on Friday. “I also wouldn’t be surprised if a little consolidation. Look, we’re up 40% this month which is only 15 days old.”

On Friday, Bitcoin crossed the $60,000 mark for the first time since April. The bullish move came on the excitement surrounding progress on bitcoin ETFs.

“We’re excited that people recognize that approval is imminent,” said Yusko, who’s also managing partner of Morgan Creek Digital. “We’ve been bullish on cryptocurrency, and bitcoin in particular, for the longest time.”

Yet, he’s questioning the performance’s sustainability.

“A pause that refreshes given how overbought we are right now wouldn’t surprise me,” said Yusko. “There is the risk of the buy the rumor, sell the news.”

Any profit-taking would be temporary, according to Yusko. His call is for bitcoin to hit $250,000 in five years.

“It’s classic supply and demand. One of the nice things about bitcoin as an asset is it has a finite supply,” he said. “We know every day for the next 140 years how many bitcoin will be minted through the mining process.”

In five years, Yusko estimates bitcoin’s value by market cap will equal gold.

“I believe bitcoin has and is replacing gold. It’s now digital gold,” noted Yusko. “It’s a perfect store value.”

Part of his reasoning surrounds a long-term deflation prediction, and it’s a scenario that’s rarely being discussed as the world copes with inflation spikes and a supply chain crisis.

Yusko contends upward prices pressures are a kneejerk reaction to the massive global Covid-19 economic lockdowns.

“The likelihood of us getting a full-on inflationary period, I think, is low,” he said. “Normal is that we are in a deflationary death spiral, and it’s been going on for a couple of decades.”

He cites an aging population and the impact of massive virus aid measures as significant catalysts.

“We have bad demographics, too many people reaching retirement age, and we have too much debt,” Yusko said. “That all leads to deflation.”