Billionaire John Paulson calls cryptocurrencies “worthless” and says he wouldn’t invest short either. “I wouldn’t recommend anyone to invest in cryptocurrencies,” he said.
Billionaire U.S. hedge fund manager John Paulson remains violently opposed to investing in cryptocurrencies, calling them a “bubble” and saying that “regardless of where they are trading today, [cryptocurrencies] will eventually prove to be worthless.”
Despite that, however, he has invested in crypto. In an interview today with Bloomberg media he says thus:
Bloomberg asks, “What about cryptocurrencies, are you a believer?
-No I’m not. And I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent that there’s more demand than limited supply, the price would go up. But to the extent that demand falls, the price would fall. There is no intrinsic value to any of the cryptocurrencies, except that there is a limited amount.
He adds, “Cryptocurrencies, regardless of where they trade today, will eventually prove worthless. Once the exuberance wears off or the liquidity dries up, they will dwindle to zero. I would not recommend anyone to invest in cryptocurrencies.”
The media outlet asks him, “Based on what you just said, why not short a large amount of some sort in cryptocurrencies?
-The reason we shorted subprime (high risk) in size was because it was asymmetric: shorting a bond at par that has a limited duration that trades at a 1% spread to Treasuries. So you can’t lose more than the duration spread. In cryptocurrencies, the downside is unlimited. So even if you could be right in the long run, in the short run, you would be wiped out. In the case of Bitcoin, it went from $5,000 to $45,000. It’s too volatile to go short.
Paulson is the hedge fund manager who made a fortune betting against the U.S. housing market about 14 years ago.
Paulson said he continues to buy gold in anticipation of rising inflation as the money supply expands. He said
The money supply went up 25% last year and the best indicator of inflation is the money supply. So I think inflation is coming well above current expectations.
Other billionaires feel differently about investing in crypto. We at DiarioBitcoin
have reviewed many who invest part of their fortunes (not all, mind you) in cryptocurrencies:
Fuentes: <a href=”https://www.bloomberg.com/news
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