- Stanley Druckenmiller criticizes the Federal Reserve, says Bitcoin is a “solution”
- The investors says Bitcoin would most likely remain in the lead as a store of value
Stanley Druckenmiller Criticizes Federal Reserve Over Cryptocurrency
Stanley Druckenmiller is a legendary investor who has been for over 40 years trading currencies, commodities, stocks, and for a while now, bitcoin. He gave his remarks on the looming cryptocurrency market, which has skyrocketed to valuations over $2tn this year.
Speaking to CNBC’s Squawk Box, Mr. Druckenmiller discussed the Federal Reserve’s approach to the economy. He speculated on how this could present an opportunity for cryptocurrencies to shine. “Five or six years ago, I said that crypto was a solution in search of a problem,” he said in the interview. “That’s why I didn’t play the first wave of crypto . We already have the dollar, so what do we need crypto for? Well, the problem has clearly been identified, it’s Jerome Powell and the rest of the world’s central bankers.”
Stanley Druckenmiller criticized the Federal Reserve, led by Chairman Jerome Powell. He said that the monetary stimulus is inflating a massive asset bubble. The ballooning debt is threatening to dethrone the dollar from its reserve currency status.
Repeated Economic Conditions Predict Turmoil
The Fed’s current policy is to purchase, on a monthly basis, at least $120bn of bonds in order to keep the economy stable. In addition, the central bank has kept interest rate low to allow ultra-loose borrowing conditions so that the economy could accelerate and recover from the pandemic hit.
Mr. Druckenmiller, has worked alongside George Soros. He commented the market is in a “raging mania in all assets”. He compared the current rally in the stock market with the buying frenzy in 1999. “I knew we were in a raging mania in ’99, but it kept going on. If you had shorted the tech stocks in mid ’99, you were out of business by the end of the year.”
On the topic of Bitcoin and cryptocurrencies, the founder and CEO of Duquesne family office said Bitcoin will be hard to unseat as a store of value. This is due to its 14-year history and the finite supply. “Ethereum has the lead in terms of smart contracts, in terms of commerce. But Facebook was not the first social network, it was number 11. Yahoo may have invented the search engine, but we all know what happened with Google versus Yahoo. It’s just not probable in my mind that Ethereum is gonna be the ultimate winner.”
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