Cryptocurrency Price Check: John Paulson Calls Crypto a ‘Worthless Bubble’

Billionaire investor John Paulson had harsh words for cryptocurrencies Monday, calling digital currencies “a limited supply of nothing.”

Paulson, co-founder of Carlyle Group who became famous in 2007 by shorting the US housing market, made the comments to “Bloomberg Wealth with David Rubenstein,” adding that cryptocurrencies are a bubble that will “eventually prove to be worthless.”

“I would describe them as a limited supply of nothing,” he said. “There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.”

“Once the exuberance wears off, or liquidity dries up, they will go to zero,” he added. “I wouldn’t recommend anyone invest in cryptocurrencies.”

Bitcoin was off nearly 1% to $47,818 on Monday, according to CoinDesk, but it sill holding on to a year-to-date gain of 65.5%, while Ethereum was down slightly at $3,179 and Dogecoin was off marginally at 27 cents each.

James Edwards, cryptocurrency specialist at Finder, said “Bitcoin is taking a back seat right now as the competition between layer-1 protocols like Cardano, Solana and Avalanche heats up.”

“Bitcoin is likely to hover around psychological resistance at $50,000 until a catalyst event stimulates the next wave of buying,” he said.

Markets are still focused on the public narrative right now, Edwards added, “so if there is no major news event such as another major tech company adding Bitcoin to their balance sheet, then I wouldn’t be surprised to see it retrace as low as $43,000, based on previous market cycles.”

In other cryptocurrency news, Citigroup said last week it was considering offering bitcoin futures trading for some institutional clients, citing increased demand in the cryptocurrency space.

Cryptocurrency analysts noted that governments around the world are stepping up their efforts to regulated cryptocurrencies.

Winston Ma, a former managing director and head of North America at China Investment Corp., said Canada has been enforcing a tightened regime for cryptocurrency exchanges in recent months.

He noted that the Ontario Securities Commission has barred a pair of trading platforms that offer crypto services from trading the popular stablecoin Tether, according to regulatory documents.

“It seems that Canada is joining the US and China, the two largest crypto markets and also the two most powerful regulatory enforcers, in taking regulatory actions against stablecoins like Tether,” said Ma., author of “The Digital War – How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace.”

While the major economies of the world don’t agree on much these days. Ma said “there’s one issue on which both superpowers see eye to eye: the regulation of ‘stablecoins'”.

David Lesperance, managing partner of immigration and tax adviser with Lesperance & Associates, said “those with undisclosed cryptocurrency are facing a cross-roads.”

They can either retain expert counsel to do a tax efficient disclosure to bring themselves in compliance, or “condemn yourself to playing hide and seek with a tax authority who has unlimited time and resources and is joined globally by other tax authorities who can also out you.”

For those who had previously chosen “Path B” because they thought they could hide behind “mixers”, Lesperance said, they should note the case of Larry Dean Harmon.

Harmon, 38, of Akron, Ohio, ran a mixer called Helix, which federal investigators said allowed customers for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin

“Harmon pleaded guilty recently conspiracy to launder monetary instruments,” Lesperance said. “Facing up to 20 years in prison, it is reasonable to think that his records are a major bargaining chip in his sentencing negotiations.”

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This article was originally published by TheStreet.
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Text source: MCC.EXCHANGE

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