Billionaire John Paulson Warns Cryptocurrencies Will Be Worthless, Bitcoin Too Volatile to Short – Markets and Prices Bitcoin News
Billionaire hedge fund supervisor John Paulson, famed for making a fortune betting in opposition to the U.S. housing market, says that cryptocurrencies are a bubble that may show to be “worthless.” While he sees limitless draw back to crypto, he is not going to quick bitcoin, nonetheless. “Even though I could be right over the long term, in the short term, I’d be wiped out,” he defined.
Famous Investor John Paulson Predicts Crypto Will Be Worthless
John Paulson, the president and portfolio supervisor of U.S. funding agency Paulson & Co., is an American billionaire hedge fund supervisor who grew to become world-famous in 2007 by shorting the U.S. housing market. He foresaw the subprime mortgage disaster and wager in opposition to mortgage-backed securities by investing in credit score default swaps.
Paulson shared his views on cryptocurrency and bitcoin on Bloomberg TV Monday in an interview with Carlyle Group founder David Rubenstein.
Responding to the query of whether or not he’s a believer in cryptocurrency, Paulson affirmed: “No, I’m not.”
He elaborated: “I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent there’s more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.” The billionaire hedge fund supervisor added:
Cryptocurrencies, no matter the place they’re buying and selling in the present day, will finally show to be nugatory. Once the exuberance wears off, or liquidity dries up, they may go to zero. I wouldn’t advocate anybody spend money on cryptocurrencies.
Paulson was additional requested “why not put a big short of some type on cryptocurrencies” since he believes that they may turn into nugatory.
He defined: “The reason we shorted subprime in size was because it was asymmetrical — shorting a bond at par that has a limited duration that trades at a 1% spread of Treasuries. So you can’t lose more than the spread in the duration.” He continued:
In crypto, there’s limitless draw back. So though I may very well be proper over the long run, within the quick time period, I’d be worn out. In the case of bitcoin, it went from $5,000 to $45,000. It’s simply too risky to quick.
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