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Bill Gross, then-co-chief investment officer of Pacific Investment Management Co., speaks at the Morningstar Investment Conference in Chicago, Illinois, U.S., on Wednesday, June 8, 2011.

Tim Boyle/Bloomberg

The limited supply of bitcoin may drive up its value for now, but also makes it an unlikely substitute for currencies or gold in times of economic distress, according to Bill Gross, the billionaire bond manager with Janus Henderson Group Plc.

"It is not really a currency alternative at the moment," Gross said Thursday in an interview with Bloomberg Television. "Buying a bag of groceries at the grocery store is going to be a little difficult."

Only 21 million bitcoins can ever be minted under the terms of the digital currency, which saw its price spike to almost $20,000 on Thursday. The cryptocurrency's high volatility is also 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.

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Bitcoin's value has been inflated along with other assets as a result of global central bank policies to reduce interest rates, Gross said. Those moves have driven up investor appetites for riskier assets in the search for higher yields.

Investors are looking at bitcoin "as a mania that's fulfilling an upward and upward price movement," he said.

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