Skip to main content

Billionaire John Paulson Warns Cryptocurrencies Will Be Worthless, Bitcoin Too Volatile to Short

Billionaire John Paulson Warns Cryptocurrencies Will Be Worthless, Bitcoin Too Volatile to Short

Billionaire hedge fund manager John Paulson, famed for making a fortune betting against the U.S. housing market, says that cryptocurrencies are a bubble that will prove to be “worthless.” While he sees unlimited downside to crypto, he will not short bitcoin, however. “Even though I could be right over the long term, in the short term, I’d be wiped out,” he explained.

Famous Investor John Paulson Predicts Crypto Will Be Worthless

John Paulson, the president and portfolio manager of U.S. investment firm Paulson & Co., is an American billionaire hedge fund manager who became world-famous in 2007 by shorting the U.S. housing market. He foresaw the subprime mortgage crisis and bet against mortgage-backed securities 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.

Responding to the question of whether he is 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 manager added:

Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.

Paulson was further asked “why not put a big short of some type on cryptocurrencies” since he believes that they will become worthless.

He explained: “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 unlimited downside. So even though I could be right over the long term, in the short term, I’d be wiped out. In the case of bitcoin, it went from $5,000 to $45,000. It’s just too volatile to short.

What do you think about John Paulson’s comments on bitcoin and cryptocurrencies? Let us know in the comments section below.



from Bitcoin News https://ift.tt/3jv9O57
Labels:

Comments

Post a Comment

Popular posts from this blog

Deep Web Roundup: Dream Adds Monero and Bitcoin Tumbler “Chip Mixer” Launches

The darknet has been quiet of late, which is the way it’s meant to be. No news means no mega busts, honeypots, or mass market shutdowns. Even when it’s out of the spotlight though, the deep web is quietly making news, whether trialling the latest privacy coins or the newest coin mixers that promise to restore a little of the privacy that’s being stripped away from bitcoin users on a daily basis. Also read: U.S. Agency ICE Conducts Investigations That Exploit Blockchain Activity The Battle for Privacy Heats Up Privacy is all relative, but of late there’s been relatively little privacy to be enjoyed by bitcoin users. Blockchain monitoring software is becoming more sophisticated and more common, with U.S. law enforcement agencies using it to profile and hunt down deep web users. Chip Mixer is a relatively new bitcoin tumbler that’s designed to restore some of that privacy. Available on both the clearnet and darknet, the service uses a variety of techniques to obfuscate blockchain m...
10 comments
Read more

Ombudsman Receives Complaints About Crypto Investments in Spain

The Spanish ombudsman has been receiving complaints about cryptocurrency and how some Spanish citizens investing in these vehicles have lost everything. In his annual report, Angel Gabilondo recognized the rise of cryptocurrencies as a new problem due to the little or no regulation crypto sees in the country. In the same way, the EU has also warned about these assets recently. Spanish Ombudsman Gives His Take on Crypto Angel Gabilondo, the Spanish ombudsman, has given his take regarding cryptocurrencies and the effects they have on citizens investing in some of these projects. Gabilondo said in his yearly report that cryptocurrencies have become “a new problem” during the year examined, with many people having lost all of their funds invested. The report states : Cryptocurrency exchange companies or platforms are not regulated in the legal system, are not subject to any public supervision system, nor do they benefit from deposit guarantee systems. The affected users that sought...
Post a Comment
Read more

2021 Bitcoin Price Predictions: Analysts Forecast BTC Values Will Range Between Zero to $600K

As bitcoin has touched new price highs on Thursday nearing the $50k handle, people have been curious as to where the price will go in the future. Meanwhile, despite the gains so far, a number of luminaries, analysts, executives, and proponents from the crypto space believe the leading crypto asset will reach between $60k to six-digits this year. Mike Novogratz Predicts $100K Bitcoin: ‘Other CFOs and CEOs Are Saying, What Should We Be Doing?’ Satoshi Nakamoto’s invention has gained mass appeal in recent times as the leading digital asset bitcoin ( BTC ) has reached its highest value ever in 2021. On Thursday morning (EST), BTC spiked to an all-time high (ATH) at $48,697 per unit. Earlier in the morning at around 2 a.m., bitcoin was exchanging hands for $44,485 and saw an 8.98% increase since then. At the time of publication, at 6:30 p.m. (EST) on February 11, 2021, bitcoin (BTC) is swapping for $47,821 per coin. With BTC so close to the $50k mark, people have been forecasting ...
Post a Comment
Read more