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Billionaire investor John Paulson doesn’t recommend anyone to invest in crypto, call it a bubble

Speaking in a recent interview with Bloomberg TV, the co-founder of Paulson & Co, a New York-based firm launched in 1994, John Paulson criticized the volatile nature of cryptocurrencies while advocating investing in traditional safe-haven assets like gold. And he doesn’t advise anyone to invest in crypto since it is nothing but a bubble.

billionaire-portfolio-manager-john-paulson-doesnt-recommend-anyone-to-invest-in-crypto-call-it-a-bubbleSubprime short investor and billionaire portfolio manager John Paulson

Billionaire investor John Paulson says crypto has no intrinsic value

Over ten years ago, Paulson managed to earn a whopping $20 billion by shorting subprime call options during the mortgage crisis. Now, he is 65, and he expects the current increasing USD prints to drive the rates of inflation way higher than everybody expects, and he believes that gold is a hedge against inflation at the moment.

Paulson recently devolved his hedge fund into a family office after a 76.5% reduction in assets under management value from a peak of $38 billion in 2011 to $9 billion in 2019.

During the interview, when asked about his views on the emerging crypto market, he stated that assets have a limited supply of nothing and no intrinsic value. He was citing the growing volatility of the nascent space, compared to the relatively stable traditional market, as a reason to discourage investment.

After making billions of dollars, Paulson bought many gold and gold futures and turned into a gold bug. However, he said that although the price of the precious metal fell to $1,700, it remains a good hedge during times of massive inflation, since it soared back in 1970 when the world saw inflation like that. He explains the value of gold by a very limited supply of investible gold.

“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 concluded his thoughts on the question of believing in cryptocurrencies with a harsh response.

When asked about gold’s prospects as a worthy investment strategy in the current financial landscape, Paulson noted the increased supply was entering the market in response to the COVID-19-related economic fallout, up about 25% last year, believing it to be the best indicator of future inflation.

One of the reasons he values ​​gold is because the supply of investable gold is very limited. He has referred to cryptocurrencies as a bubble and called crypto a limited supply of nothing. He claims that no crypto has any intrinsic value apart from the limited amount, as is in the case of Bitcoin.

They will eventually turn out to be worthless, he believes, as soon as liquidity dries up or the exuberance wears off, they will go down to zero.

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