Cliff Ashness.
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Cliff Asness, co-founder of AQR Capital Management, believes Bitcoin is in a speculative bubble after the cryptocurrency’s rapid rally took it above $100,000 following November’s presidential election.
“I’m on the bubble side, on the net,” Asness said Monday on CNBC’s “Money Movers.” “To turn me off of that, you don’t actually need a price change, you need a use case. That could convince me to maybe become more of a crypto person if I see any use for it outside of speculation and crime.”
Asness said there are three uses for crypto that he has identified: speculation, use in war-torn countries and paying cyber ransoms.
Bitcoin rose 120% in 2024 after a huge boom at the end of the year due to the election of newly elected President Donald Trump. Investors hoped Trump would usher in a golden age of crypto, including supportive deregulation of the industry and a national strategic bitcoin reserve. The digital currency is down 3% this new year and last traded around $90,000.
“There is no fundamental trend for crypto because I don’t know what the fundamentals are, but there is a price trend,” Asness said. “So I suspect most of the trend followers who have it in their universe are actually long.”
Bitcoin over the past year.
While Asness is bearish on crypto, he noted that he wouldn’t bet against it due to its volatility.
“I wouldn’t short crypto just because shorting things with 100% annual volatility can be a bit scary. I think we’ve all discovered what concentrated shorts can do to a portfolio,” he added.
Asness co-founded AQR in 1998 after a stint at Goldman Sachs. He and his partners captured the quantitatively driven company’s investment philosophy at the Ph.D. program, focused on value and momentum strategies.