The professional investor John Paulson, who became famous in the financial crisis of 2008, does not believe in cryptocurrencies. With a view to the risk of inflation, however, he sees – once again – the time for gold has come.
The American hedge fund manager John Paulson, thinks cryptocurrencies are a bubble. “I would describe them as a limited offer of nothing,” he said in an interview with Bloomberg TV.
“To the extent that the demand exceeds the limited supply, the price will rise. But as demand falls, it will fall. Cryptocurrencies have no intrinsic value, except that there is a limited amount of them, ”said the stock market guru. Paulson, who got rich and famous by betting against the US real estate market before the 2008 financial crisis, firmly believes that digital forex will eventually prove worthless.
Together with numerous banking veterans, he is one of the crypto critics’ camps. Despite rising prices and an increasingly broad group of buyers of tokens and coins, these players are not changing their views.
“Too volatile to short”
And while other hedge funds have long been speculating with Bitcoin on a large scale, Paulson thinks that digital assets are not even suitable for betting against them. “It’s just too volatile to shorten,” said Pauslon.
He is reminiscent of the past. The reason his company bet against the US home market and the value of subprime bonds in 2009 was because of asymmetry. The risk of loss was limited, but the chance of winning was high. Since then, he has not seen an investment that has shown such an asymmetry.
Therefore no bets against crypto. The risk of losing a bet against Bitcoin & Co is too great. “Even if I could be right in the long term, that would erase me in the short term.”
Inflation higher than expected
In contrast, he currently thinks gold is a good investment. As early as 2009 and in the period thereafter, he had expected that the stimulus measures of the central banks would cause inflation. However, due to the higher capital requirements for the banks, the money did not reach the economic cycle and was, so to speak, “recycled” through the central banks ‘bond purchases and the banks’ deposits with the national banks.
This time it was different in the Corona crisis. “I think we will get inflation far beyond current expectations.”
Some of the Swiss banks achieved record profits in the first half of 2021. Will that also be the case in the second semester?
Yes, in any case. The Swiss banks are ideally positioned.
Yes, it will get even better in the second half of 2021.
The further development depends entirely on the further pandemic.
No, the second semester of 2021 will be slightly weaker.
No, by the end of the year the profits will have melted away again.