Billionaire John Paulson advises everyone against investing in cryptocurrencies and sees cryptos as a bubble that will ultimately prove worthless. Overnight, the Bitcoin price also falls relatively sharply.
Among other things, Paulson gained enormous notoriety in 2007 when he bet against the real estate market. He earned around $3.7 billion from the emerging crisis. In an interview with Bloomberg, he indicated that he does not think much of cryptocurrencies as an investment.
John Paulson recommends gold
“I wouldn’t advise anyone to invest in cryptocurrencies,” said the 65-year-old, who recommends gold above all else when it comes to stores of value. Paulson predicted that inflation rates could rise above expected levels due to the increasing supply of cash. He believes gold will have its day shortly.
Many see bitcoin as the digital equivalent of gold. As a result, debates about whether it’s better to invest in gold or bitcoin keep coming up.
Despite rising inflation rates over the past year, Bitcoin has outperformed gold. Another reason why Paulson’s comments are likely to be met with criticism from crypto advocates.
After gold hit its all-time high of $2,063 in August 2020, it struggled to maintain that price. Since then, the price has steadily declined. Currently, it is trading at around USD 1,812. Moreover, gold is not nearly as volatile as cryptocurrencies.
The BTC price, on the other hand, has rallied in recent months after the market-wide crash in May sent it plummeting from its all-time high of $63,503 in April to less than half that value just two months later.
After briefly breaking through the 50,000-USD mark last week, it retreated again, particularly last night. Currently, BTC is trading at around $47,800 USD. Within three hours, bitcoin lost about four percent of its value overnight.
In total, Paulson actually made nearly $20 billion for himself and his investors when subprime mortgage bonds collapsed and triggered the global financial crisis. Since then, his opinions on markets and investing have been highly sought after, although he has had a mixed track record since then. Paulson’s hedge funds managed $36 billion at their peak in 2011, down from $6 billion in 2018.
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