Investing.com — Cliff Asness, co-founder of AQR Capital Management, expressed concern that AQR Capital Management is in a speculative bubble. This declaration comes after the rapid rise of the cryptocurrency which pushed its value above $100,000 following the November presidential election.
Sharing his views on CNBC’s “Money Movers” Monday, Asness said he was leaning toward the idea of a bubble. He added that it would take more than just a change in price to change his perspective, in particular, a practical use case could potentially convince him to invest more in crypto.
According to Asness, he identified three main uses for crypto: speculation, utility in countries in conflict, and payment of cyber ransoms.
Asness highlighted that he finds it difficult to identify a fundamental trend for crypto due to the lack of clarity on what fundamentals are. However, he acknowledged that a pricing trend exists. He speculated that most trend followers who include it in their portfolio are likely long the digital asset.
-Despite Asness’ bearish stance on the crypto, he mentioned that he would refrain from betting against it due to its high volatility. He pointed out that shorting assets with 100% annual volatility can be risky, as many have learned about the potential impacts of concentrated short positions on a portfolio.
Bitcoin saw a 120% rally in 2024, significantly boosted by the election of President-elect Donald Trump. Investors were optimistic that Trump’s presidency would bring a favorable era for crypto, including deregulation of the industry and the establishment of a strategic national bitcoin reserve.
This article was generated and translated with the help of AI and reviewed by an editor. For more information, see our T&Cs.
