“I wouldn’t recommend anyone invest in cryptocurrencies,” John Paulson told David Rubenstein, co-founder of Carlyle Group, on Bloomberg TV.
Rubenstein: What about cryptocurrencies? Are you a believer?
Paulson: No, I’m not. And I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent there’s more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.
Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.
Rubenstein's family office was the lead investor in the Series C funding round for cryptocurrency play Paxos. The press release on Declaration Partners investment in Paxos stated:
- The launch of Paxos Crypto Brokerage, a platform solution that powers crypto services for PayPal and Revolut US;
- The issuance of more than $7.5 billion in stablecoins across three of the leading US dollar-backed stablecoins;
- Becoming the first company to settle US equity trades on a blockchain outside of the legacy system (under No-Action relief from the US Securities and Exchange Commission staff); and
- Confirmation of more than $3.5 trillion in commodities trades with its Post-Trade automation service.
Rubenstein's Declaration Partners threw more money at Paxos in its $300 million April 2021Series D funding round, which valued the firm at $2.4 billion. That press release stated:
- Supported the launch of crypto buying and selling services on Venmo through its partnership with PayPal;
- Received conditional approval for the first de novo Trust Bank charter for digital assets from the Office of the Comptroller of the Currency;
- Completed same-day settlement of traded stocks for Instinet and Credit Suisse via the Paxos Settlement Service;
- Grew total stablecoin assets across three of the leading US dollar-backed stablecoins to nearly $10 billion; and
- Tokenized more than 100,000 oz of the highest quality investment-grade gold with PAX Gold.
Paxos latest press release stated:
Paxos is building a new system that allows assets to move instantaneously, anywhere in the world, at any time, in a trustworthy way. Paxos uses technology to tokenize, custody, trade and settle assets. It offers crypto solutions for enterprises, crypto trading and settlement solutions for securities and commodities.
That would be powerful tool for billionaires and their sponsored government officials. An Afghan President could leave the country with only the clothes on their back after Paxos'ing millions to their desired destination, say Dubai.
Update 3-11-22: On Tuesday, PAX Gold reached $2,071, its highest price in the last three months.
Update 5-27-22 Paxos received a federal trust charter from the Office of the Comptroller of the Currency. Paxos National Trust entity is a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services. It is different from New York Department of Financial Services-chartered Paxos Trust Co.
Update 8-2-22: A number of FDIC insured banks ran with the crypto devils and may go under as a result. How this is remotely OK is a question one should ask David Rubenstein and his former employee Jerome Powell/
