Cliff Asness.
Chris Goodney | Bloomberg | Getty Images
Cliff Asness, co-founder of AQR Capital Management, believes that Bitcoin is in a speculative bubble after the cryptocurrency quickly rebounded above $100,000 after the November presidential election.
“Online, I’m on the side of the bubble,” Asness told CNBC.money mover“on Monday. “To get me out of this, you really don’t need to change the price, you need a use case. That could convince me to be more of a crypto guy when I find out there’s any use for it besides speculation and crime.
Asness said he has identified three uses for cryptocurrencies: speculation, use in war-torn countries and payment of online ransoms.
After the election of President-elect Donald Trump, Bitcoin surged at the end of the year and is up 120% in 2024. Investors hope Trump will usher in a golden age for cryptocurrencies, including supporting deregulation of the industry and the creation of a national strategic Bitcoin reserve. The digital currency has fallen 3% in the new year and was last trading close to $90,000.
“Cryptocurrencies don’t have fundamental trends because I don’t know what the fundamentals are, but there are price trends,” Asness said. “So I guess most trend followers who have it in their universe are actually long.”
Bitcoin over the past year.
Although Asness is bearish on the cryptocurrency, he noted that he would not short it due to its volatility.
“I wouldn’t short cryptocurrencies just because shorting something that has 100% annual volatility can be a little scary. I think we’ve all discovered what concentrated shorting can do to a portfolio,” he added.
Asness co-founded AQR in 1998 after a stint at Goldman Sachs. He and his partners built the quant-driven firm’s investment philosophy while working on their Ph.D.s at the University of Chicago. Plan, focusing on value and momentum strategies.
