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.”

Source: Toronto Daily Star
Date: September 2nd, 2021
Link: https://www.thestar.com/business/thestreet/2021/08/30/cryptocurrency-price-check-john-paulson-calls-crypto-a-worthless-bubble.html

Discussion

1. “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.”
   First off, what is a “stablecoin”.
   Answer: it is a cryptocoin that attempts to peg its value to an outside asset, which for Tether is the U.S. dollar.
2. Second, why the regulation from Canada (and others)? Problematically, the stablecoin Tether only has about 1% of U.S. dollars on hand to peg to that dollar, leading many to believe that it is not a stablecoin at all.