John Paulson, a billionaire hedge fund manager, has harshly criticized cryptocurrencies. He described them as “bubbles” that would be “worthless” despite their being among the most popular commodities on the market.
Paulson stated that cryptocurrencies have no intrinsic value except for a limited amount, during an interview on “Bloomberg Wealth with David Rubenstein”.
He said that the segment is “too volatile” and pointed out that Bitcoin rose from US$5,000 up to US$45,000 in a very short time.
“Cryptocurrencies will eventually become worthless, no matter where they trade today. They will become worthless once the exuberance fades or the liquidity runs dry. Paulson said that he wouldn’t recommend anyone investing in cryptocurrency. He was famous for his betting against the US housing markets more than a decade before.
“I believe that cryptocurrency is a bubble. He said that they are a limited supply of everything and that prices will only rise to the point where there is more demand than supply.
Notably, cryptocurrency, which have not yet been considered legal tender in any major economies, has attracted a lot of interest over the last few years. Elon Musk, founder of Tesla, has been driving the crypto buzz in recent years.
Musk’s company had announced in March that it would accept cryptocurrency payments. This was to boost Bitcoin’s value. Tesla disappointed crypto enthusiasts in May when it reversed its decision.