Billionaire portfolio manager John Paulson has openly criticized the volatile nature of cryptocurrencies. He advised interested investors to opt for traditional investment assets like gold instead.
When asked about his views on the emerging cryptocurrency market in an interview with Bloomberg, Paulson claimed that the assets have a “limited supply of nothing” and “no intrinsic value.” He cited the heightened volatility of the crypto space in comparison with the relatively stable traditional markets as a reason to be discouraged from investing in cryptocurrencies.
Paulson, who is a historic beneficiary from the U.S. housing financial market collapse of 2008, pointed out his inability to identify the same asymmetrical patterns noted in his legendary trade a decade earlier. He said:
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.
His opinion on the world’s flagship crypto, Bitcoin, matches sentiments echoed by fellow billionaire investor Warren Buffet, who criticized the inherent value of digital assets back in 2018, claiming they were “rat poison squared.”
Paulson recently decided to transfer his hedge fund into a family office after a 76.5% reduction in assets under management from a peak of $38 billion in 2011 to $9 billion in 2019.