John Paulson, the billionaire who famously shorted the U.S. subprime mortgage bubble in 2008, has called crypto a bubble that will “eventually prove to be worthless” in an interview with Bloomberg TV.
Fast facts
- “I wouldn’t advise anyone to invest in cryptocurrencies,” said the 65-year-old, who has consistently backed gold as a store of value. Predicting inflation rates may rise above expected levels due to the increasing cash supply, Paulson said gold is set to have its moment.
- Despite rising inflation levels in the past year, Bitcoin has outperformed gold, so Paulson’s comments are likely to raise some criticism from supporters within the crypto industry. After hitting its all-time high of US$2,063 in August 2020, gold has struggled to maintain that price and has been steadily decreasing since then. It was trading at US$1,812 at press time, according to Monex.com.
- BTC has seen a price recovery in recent months after the market-wide crash in May brought it down from its all-time high of US$63,503 in April to less than half that only two months later. After briefly breaching the US$50,000-mark last week, it has since pulled back and was trading at US$47,292.88 at press time, according to CoinMarketCap.
- Paulson made US$20 billion for himself and investors when subprime mortgage bonds collapsed, triggering the Global Financial Crisis. Ever since then, his opinion on markets and investing has been highly sought after, though he has had a mixed track record since then. Paulson’s hedge funds managed US$36 billion in their peak in 2011, but by 2018 totalled US$6 billion.