John Paulson, a billionaire, says cryptocurrencies are a bubble that will prove to be worthless.
Despite being regarded as one of the market's hottest commodities, billionaire hedge fund manager John Paulson has slammed cryptocurrency, calling it a "bubble" that will eventually become "worthless."
During an appearance on 'Bloomberg Wealth with David Rubenstein' on August 30, Paulson stated that cryptocurrencies had no fundamental worth other than a "limited amount."
He described the market as "extremely volatile," noting that Bitcoin climbed from $5,000 to $45,000 in a matter of weeks.
"Regardless of where they are exchanged today, cryptocurrencies will someday prove to be useless. They will plummet to zero if the euphoria wears off or liquidity runs out. I would not advise anyone to invest in cryptocurrency "said Paulson, who made a name for himself by betting against the housing market in the United States more than a decade ago.
"In my opinion, cryptocurrencies are a speculative bubble. I'd characterise them as a finite supply of nothing "He went on to say that prices would only rise to the point where demand outstripped supply.
Notably, cryptocurrencies, which have yet to be recognised as legal cash in any major economy, have attracted a lot of attention in recent years. Elon Musk, the founder of electric vehicle manufacturer Tesla, has recently fueled the cryptocurrency hype.
Musk's company raised the value of Bitcoin by declaring in March that it would take Bitcoin as payment. Tesla, on the other hand, disappointed crypto fans when it reversed its decision in May.