John Paulson, who made a fortune for himself and investors when he shorted subprime mortgage bonds during the crisis that hit the U.S. in 2008-2009, has told Bloomberg TV that he does not advise anyone to invest in crypto since it is nothing but a bubble.
Paulson slams crypto, praises gold as inflation hedge
During the mortgage crisis over 10 years ago, Paulson managed to earn a whopping $20 billion by shorting subprime call options. Now, he is 65 and expects the currently increasing USD printings to drive rates of inflation far higher than anyone expects and believes that gold is a hedge against inflation at the moment.
As for cryptocurrencies, he stated that they would eventually prove worthless, in a conversation with the co-founder of Carlyle Group, Rubenstein on Bloomberg TV.
After his assets dropped to $9 billion in 2019 from almost $40 billion in 2011, he turned his hedge fund Paulson & Co. Inc. into a family office and has been engaging only in investing, mostly managing his own funds.
After he made billions, Paulson acquired a great deal of gold and gold futures and, as some believe, turned into a "gold bug." He reckons, though, that despite the current drop of the precious metal to $1,700, it is still a good hedge during a period of 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.
Crypto is a "limited supply of nothing"
He 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 of it, as is the case with 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.
Previously, U.Today reported that Steve Eisman, one of the traders who shorted the U.S. housing market and was one of the main characters in the "Big Short" movie, prefers to stay away from Bitcoin.
Back in 2018, he demonstrated a skeptical attitude toward crypto, saying that it does not add any value.