Billionaire John Paulson recently criticized cryptocurrencies. In an interview, he called them a bubble that will prove to be "worthless", but at the same time admitted that he has no plans to short it.
Usually, smart investors study what they can do and what they can lose in a bearish bet. So when Paulson bet against mortgage bonds, his downside was limited to a few percentage points if the bonds paid off, while his upside potential was essentially 100% in the event of a bond default.
But this is not the case with Bitcoin as the cryptocurrency saw growth from less than $ 12,000 a year ago to nearly $ 50,000 today. Meanwhile, Dogecoin is up by more than 8000% over the past year. All this are big enough steps to tear down any investor in a short position.
In any case, Bitcoin lost approximately 2.2% on Monday morning, and Paulson's comments may be the reason for it.
Also, many crypto investors are currently seeking alternatives to Bitcoin and Ethereum, since the risks in them are lesser, while the potential for growth is far greater.
