The Fed’s policies threaten the status of the US dollar as the world’s reserve currency, said Druckenmiller. According to the investor, Bitcoin is more manageable than gold and has a better beta.
In recent days, well-known investor Stanley Druckenmiller spoke about Bitcoin in an interview on CNBC. He believes that the pioneering cryptocurrency will continue to lead the market thanks to its attribute as a store of value.
The former CEO of the Duquesne Family Office harshly criticized the Fed’s expansionary monetary policies. He believes that they could weaken the US dollar, causing it to lose its role as the world’s reserve currency.
Druckenmiller revealed that he owns BTC and that this cryptocurrency attracted him because he considers it a store of value.
“Bitcoin could be a very attractive asset class as a store of value. Both millennials and the wealthy on the West Coast have acquired a lot of coins,” Druckenmiller said. “It has been around for 13 years and it becomes more stable as a brand with each passing day,” he noted.
The billionaire investor admits that his investment in gold is “very many times greater” than what he has made in Bitcoin. He claims that the main cryptocurrency on the market is more manageable than gold and has a better beta. This coefficient makes it possible to measure the relationship between return and risk that investment adds to a portfolio. In November 2020, Druckenmiller highlighted those advantages of Bitcoin against the precious metal.
Druckenmiller Does Not Think that Ether Will Dethrone Bitcoin as a Store of Value
Regarding whether Ether (ETH) could dethrone Bitcoin in market value, the investor believes that it will not happen. He said that Ethereum’s native cryptocurrency has an advantage over Bitcoin as a smart contract platform. Despite this, he believes that “it will be very difficult to dethrone Bitcoin as a store-of-value asset.”
To prove that thesis, he compared Ether to Yahoo, which lost market share to Google. “Yahoo invented the search engine, but everyone knows what happened between Google and Yahoo,” said Druckenmiller.
The US Dollar May Lose Its Status as the World’s Reserve Currency
Druckenmiller also harshly criticized the Fed’s expansionary monetary policy as it puts at risk the role of the US dollar as the world’s reserve currency. “The US dollar may lose its status as the world’s reserve currency 15 years from now,” said the investor. “Monetary and fiscal policy has never been as out of step with economic circumstances as it is now,” he added.
Furthermore, he stated that he sees the cryptocurrency market as a way out amid the weakness of the US dollar. “Europe is a complete disaster and no one can trust the Chinese,” said the investor. “I said that cryptocurrencies were the solution looking for a problem that is already clearly identified. It is all about Jerome Powell [the Fed Chairman] and the other central bankers of the world,” concluded the billionaire.
By Alexander Salazar