Bitcoin Is ‘Worthless,’ Housing Bubble Billionaire Says.
Just Don’t Try Betting on a Decline.
Hedge fund manager John Paulson
Cryptocurrencies won’t be the next “Big Short” even though they are “worthless,” says a hedge fund manager
who made billions betting against the U.S. housing market more than a decade ago.
In an interview with Carlyle Group founder David Rubenstein, John Paulson claimed
that cryptocurrencies are a bubble. But he also acknowledged that he’s not shorting them.
Smart short sellers need to know what they can make and what they can lose on a bearish bet.
When Paulson bet against complex mortgage bonds, his downside was limited to a few percentage points
if the bonds paid off. His upside was, essentially, 100% if the bond defaulted.
That’s not the case with Bitcoin. Bitcoin has gone from less than $12,000 a year ago, to almost $50,000 today,
while Dogecoin, a crypto favorite of Tesla CEO Elon Musk, is up more than 8,000% over the past year.
Those are big enough moves to wipe out any short seller. “There’s an unlimited downside,” says Paulson.
“It’s too volatile to short.”
Bitcoin is down about $1,000, or 2.1%, in early Monday trading. Paulson’s comments may be why.
But then again it could be nearly anything.