The well-known billionaire — John Paulson — believes that all of the frenzy on crypto isn’t making sense. He believes that cryptocurrencies are a waste of time and advises investors not to put their money into digital assets like bitcoin.
The 65-year-old billionaire investor discusses wise investments with Bloomberg, sharing his thoughts on how to make money investing. Paulson, who made his first bet on the housing market in the United States more than a decade ago, is confident in his current investment selections.
Paulson does not advocate investing in cryptocurrencies
To be clear, Paulson does not consider himself a Bitcoin enthusiast. He believes that cryptocurrency is a “bubble.” In his explanation, he states that cryptos are a finite amount of nothing. He thinks, for example, that asset values would rise until a large amount of demand outweighs a small amount of supply.
The price, on the other hand, drops as soon as the demand for the product decreases. He argues that cryptos have no true intrinsic value and that their popularity is primarily due to the limited supply available. Overall, he thinks that cryptocurrency prices would eventually fall to zero, regardless of where they are now transacted. He contends that this will occur if liquidity is reduced or popularity is diminished.
Investments that are a success
As a result of this transaction, Paulson was questioned as to why he did not take advantage of massive crypto short positions. In his own words, Paulson believes that asymmetric business is the secret to his success. Large returns and virtually no risk are guaranteed when you take a chance on an asymmetrical shortened subprime loan.
He argues that cryptography always has an endless bottom line, which he describes as follows: As a result, regardless of the long-term return, it will almost certainly wipe out any short-term investment. Bitcoin, for example, has surged from $5,000 to $45,000 in only a few months. It’s just too unexpected to be kept under wraps.
Gold has a colossal amount of potential
Following his unprecedented short position, Paulson poured a large sum of money into gold-related assets. ‘Gold Bug’ was the moniker given to him by the authorities. Paulson continues to believe that gold is a fantastic investment in times of inflation to this day. When inflation happens, people typically look for assets that will allow them to shift away from monetary options.
When faced with such challenges, gold is typically the most effective option. Gold, while it has its ups and downs, such as imbalances in supply and demand, continues to have a larger long-term potential than cryptocurrencies. He believes this to be true since the gold market is not as volatile as the cryptocurrency industry is.
The ability to make a good investment is determined by the spectator
Despite Paulson’s rationale, the majority of traders would disagree with the designation of cryptocurrencies as “useless.” Cryptocurrencies grew in importance in an era when the economy was destroyed by the Covid 19 pandemic.
During this period, cryptocurrency was the preferred investment vehicle for the majority of investors. When the economy began to deteriorate, cryptocurrency became the only thing that could save them. One of Paulson’s most important points is that cryptographic assets have no value.
This isn’t correct at all. The majority of cryptos are designed. As a result, they have a large number of examples of applications. It is very unlikely that all cryptos would eventually perish since there is so much value in them and because they serve a purpose.
Consequently, even if cryptos may not appear to be a wise investment in the perspective of one billionaire, they are unquestionably worthy of the attention of a large number of financial titans in general. Elon Musk, Mark Cuban, Grayscale, MicroStrategy, and others are examples of such entrepreneurs.