Billionaire Portfolio Manager John Paulson Says Cryptoassets ‘Will Go to Zero’

Billionaire investor and portfolio manager John Paulson has weighed in on the crypto debate, saying that digital assets are too volatile and have “no intrinsic value.”

Paulson, co-founder of New York-based firm Paulson & Co, criticized cryptoassets in a recent interview with Bloomberg, saying the industry was too volatile. Paulson was asked his opinion on the emergence of the digital asset market, which he said had a “limited supply of nothing” and “no intrinsic value.” 

Paulson, who made $20 billion for himself and investors after betting against subprime mortgages in the 2008 financial housing market collapse, noted the high volatility of cryptoassets in comparison to traditional financial markets. 

Paulson continued, saying he “wouldn’t recommend” for anyone to invest in cryptocurrencies. The legendary investor dismissed a comparison between cryptoassets and his shortselling of subprime mortgages, saying the 2008 market offered enormous upside potential in comparison to very little risk.

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.”

Paulson championed gold as a good investment, saying the massive increase in money supply to financial markets as a response to COVID-19 was likely to drive future inflation. He highlighted gold’s value as a hedge against inflating fiat currencies and a proven safe-haven asset. 

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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