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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.

Al Root

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