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Even though the crypto market has proved the test of times, some billionaire investors donāt consider it a place worth for retail investors. Billionaire investors John Paulson, who rightly predicted the subprime crisis a decade back, has called out on crypto investors.
Now, 14 years later the 2008 Financial Crisis, Paulson expresses concern over the excessive speculations in the crypto space. Speaking at an episode of āBloomberg Wealth withĀ David Rubenstein,ā Paulson, 65, said that cryptocurrencies are a bubble that will āeventually prove to be worthlessā.
āI wouldnāt recommend anyone invest in cryptocurrencies,ā he added. Well, itās not the first time that crypto assets have been receiving flak from billionaire investors. Giants like Warren Buffett have also criticized digital assets to the core.
However, over the last decade, the crypto assets have outperformed traditional asset classes like Gold by a huge margin. Moreover, Paulsonās record since his āgreatest tradeā in 2008 hasnāt been much appealing.
Last year itself, Paulson had to turn his hedge fund into a family office with assets dropping to $9 billion in 2019, from a staggering $38 billion in 2011.
Preferring Gold Over Crypto
Despite the fact that cryptocurrencies have been outperformed Gold by a great margin, Paulson prefers to stay old school and pick gold over crypto. Maybe he could make very good friends with Peter Schiff.
Jokes apart, Paulson said that as inflation picks up, they ten to get away from fixed assets and cash, and the right place to be in is Gold. Moreover, pointing at the 25% surge in the money supply by theFed, he expects inflation to be coming in excess of the current expectations. And thus, Gold! When asked whether he believes in crypto, Paulson said:
āNo, Iām not. And I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent thereās more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. Thereās no intrinsic value to any of the cryptocurrencies except that thereās a limited amountā.
He further added that cryptocurrencies will eventually prove to be worthless. And once the liquidity in the market dries, they are heading to zero, as per Paulson. When asked whether heās shorting crypto at this stage, Paulson denied saying:
In crypto, thereās unlimited downside. So even though I could be right over the long term, in the short term, Iād be wiped out. In the case of Bitcoin, it went from $5,000 to $45,000. Itās just too volatile to short.
The post Billionaire Investor John Paulson Calls Crypto A Worthless Bubble appeared first on Coingape.
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