Billionaire hedge fund manager John Paulson, who is famous for making a fortune by betting on the US housing market, says cryptocurrencies are a bubble that will prove “worthless.” Whereas he sees limitless draw back to crypto, he is not going to brief bitcoin, nevertheless. “Even if I could be right in the long run, in the short run, I would be wiped out,” he explained.
Well-known Investor John Paulson Predicts Crypto Will Be Nugatory
John Paulson, president and portfolio manager of the American investment company Paulson & Co., is an American billionaire hedge fund supervisor who turned world-famous in 2007 by shorting the U.S. housing market. He foresaw the subprime mortgage crisis and bet on mortgage-backed mortgages by investing in credit default swaps.
Paulson shared his views on cryptocurrency and bitcoin on Bloomberg TV Monday in an interview with Carlyle Group founder David Rubenstein.
In response to the question of whether he believes in cryptocurrency, Paulson confirmed, “No, I am not.”
He elaborated: “I might say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent there’s extra demand than the restricted provide, the value would go up. But to the extent that demand falls, then the value would go down. There is no intrinsic value for any of the cryptocurrencies, except that there is a limited amount. The billionaire hedge fund supervisor added:
Cryptocurrencies, no matter the place they’re buying and selling at the moment, will finally show to be nugatory. When the fatigue subsides, or liquidity dries, they will go to zero. I wouldn’t suggest anybody spend money on cryptocurrencies.
Paulson was further asked “why not put a huge shortage of some sort on cryptocurrencies” as he believes they will become worthless.
He defined: “The explanation we shorted subprime in dimension was as a result of it was asymmetrical —to short a bond at par that has a limited duration that trades with a spread of 1% of treasuries. So you’ll be able to’t lose greater than the unfold within the period.” He continued:
In crypto, there is unlimited disadvantage. So despite the fact that I could possibly be proper over the long run, within the brief time period, I’d be worn out. In the case of bitcoin, it went from $ 5,000 to $ 45,000. It’s just too fleeting for short.
