Cliff Asness says cryptocurrencies are only good for speculation and criminality, and that Bitcoin is in a bubble

Cliff Asness, co-founder of AQR Capital Management, believes bitcoin is in a speculative bubble after the cryptocurrency’s meteoric rise took it past $100,000 following the presidential election in November.

“I’m on the side of the bubble, on the network,” Asnes said on CNBC.Money carriers” Monday. “To get me out of it, you don’t really need to change the price, you need to change the use case. This is what could convince me to become more of a fan of cryptocurrencies when I find any use for them, apart from speculation and criminality.”

Asness said there are three uses for cryptocurrencies he identified: speculation, use in war-torn countries, and payment of electronic ransoms.

Bitcoin rose 120% in 2024 after the year-end surge on the back of the election of President-elect Donald Trump. Investors had hoped Trump would usher in a golden age for cryptocurrencies, including deregulation supporting the industry and the National Strategic Bitcoin Reserve. The digital currency fell 3% in the new year, and last traded near $90,000.

“There is no fundamental trend for cryptocurrencies because I don’t know what the fundamentals are, but there is a price trend,” Asnes said. “So I think most trend followers who have that trend in their world are actually long.”

Although Asness is bearish on cryptocurrencies, he noted that he would not bet on them due to their volatility.

“I wouldn’t sell cryptocurrencies just because selling things with 100% annual volatility can be a little scary. I think we’ve all discovered what concentrated short trades can do for a portfolio,” he added.

Asness co-founded AQR in 1998 after a stint at Goldman Sachs. He and his partners founded the firm’s quantitative-based investment philosophy in a doctoral degree at the University of Chicago. The programme, focusing on value and momentum strategies.