CNBC's Brian Sullivan discusses why bitcoin is drawing back with CNBC's Kate Rooney and Lawrence Lewitinn, Coindesk managing editor. Subscribe to CNBC PRO for access to investor and analyst insights on bitcoin and more: https://cnb.cx/2BT2E7y

DoubleLine Capital CEO Jeffrey Gundlach on Monday warned that bitcoin could be getting overheated after its massive run in recent months.

“I don’t like bitcoin here. I don’t like things that are up on a stilt like that,” the so-called Bond King said on CNBC’s “Halftime Report.” “Bitcoin, to me, is now sort of in bubble territory in terms of the way it’s been acting.”

Gundlach’s comments Monday come as the price of bitcoin was down sharply to under $33,000 per digital coin. The cryptocurrency on Friday hit a record high of nearly $42,000 before it began to pull back. Bitcoin, however, is still up over 75% in the last month and more than 380% since April 1.

The major rally in bitcoin has come against the backdrop of the coronavirus pandemic, with governments across the globe unleashing massive stimulus efforts to aid ailing economies. That has stoked inflation concerns for some investors, and bitcoin has been one asset to which they have turned.

The increased adoption of bitcoin generally by institutional investors has been another factor credited with helping propel its ascent. And some people, such as prominent value investor Bill Miller, believe the digital coin has further room to run — while conceding its volatility is likely to remain.

“Bitcoin’s total supply is growing less than 2% a year and it’s obvious by the price that the demand is growing much, much faster than that,” Miller told CNBC on Friday. “As long as that obtains, bitcoin is likely to go higher and perhaps considerably higher.”

Gundlach acknowledged there is a potential for bitcoin bulls to be proven correct.

“The people that point out it has a terrific supply-demand dynamic, if indeed institutions get involved, they’re right,” Gundlach said. “That’s what can create these massive moves up in bitcoin.”

In January 2020, Gundlach predicted near-term upside for bitcoin, potentially as high as $15,000 per coin in the year.

The investor has taken a more negative view in other instances. For example, in December 2017, Gundlach said, “If you short bitcoin today, you’ll make money.” At that point, bitcoin was trading above $16,000 per coin. It would go on to fall dramatically, losing well over half its value by December 2018.

Gundlach, in explaining his current stance toward bitcoin, said Monday he was concerned investors have become too optimistic.

“I think all of these things are kind of baked in right now, and the trade location is poor,” he said. “Even the dollar, I’ve been very negative on the dollar since January of 2017 but I actually turned neutral on the dollar a little bit lower than where we are right now ... just because these things seem like they’ve gotten too deeply into the consensus narrative.”

“There’s times when ... people seem to be so much on one side of the boat that I just really don’t believe the boat can sell that well,” Gundlach added, “and I believe that’s where bitcoin is on the bullish side right now.”

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