Cliff Asness says Bitcoin is a speculative bubble

Investing.com -- Cliff Asness, co-founder of AQR Capital Management, expressed concern that bitcoin is in a speculative bubble. This comes after the cryptocurrency's rapid surge pushed its value above $100,000 following the November presidential election.

Sharing his views on CNBC’s “Money Movers” on Monday, Asness stated he leans towards the notion of a bubble. He added that it would take more than a price change to shift his perspective, specifically, a practical use case could potentially convince him to become more invested in crypto.

According to Asness, he has identified three primary uses for crypto: speculation, utility in conflict-ridden nations, and for the purpose of paying cyber ransoms.

Asness pointed out that he finds it challenging to identify a fundamental trend for crypto due to the lack of clarity on what the fundamentals are. Yet, he acknowledged that a price trend does exist. He speculated that most trend followers who include it in their portfolio are likely long on the digital asset.

Despite Asness's bearish stance on crypto, he mentioned that he would refrain from betting against it due to its high volatility. He emphasized that shorting assets with 100% annual volatility can be risky, as many have learned the potential impacts of concentrated shorts on a portfolio.

Bitcoin experienced a 120% rally in 2024, significantly boosted by the election of President-elect Donald Trump. Investors were optimistic that Trump's presidency would bring about a favorable era for crypto, including industry deregulation and the establishment of a national strategic bitcoin reserve.

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Source: Investing.com