An investor who made a fortune from the subprime mortgage collapse in 2008 claims that cryptocurrency is currently one of the three main driving factors in today’s financial landscape. However, he remains unconvinced and skeptical about its potential.

During an interview on Bloomberg Television, Steve Eisman from Neuberger Berman expressed his belief in the significance of artificial intelligence (AI) and infrastructure, but he voiced his doubts about cryptocurrency.

Eisman argues that although digital assets are often touted as a hedge against inflation and traditional fiat currencies, their correlation with risk assets and the Nasdaq contradicts this thesis.

He questions the motives of crypto owners, stating that their reasons for owning it are often based on the belief that it will protect them from the demise of fiat currencies. They compare it to digital gold and view it as a safe haven in times of economic uncertainty.

However, Eisman challenges this narrative by examining the behavior of cryptocurrency when market conditions fluctuate. According to him, if crypto truly acted as a hedge against inflation, it should rise when there are concerns about inflation, the Nasdaq is down, and interest rates are up. Conversely, it should decline when the market is performing well, the Nasdaq is up, and interest rates are down. However, the reality is quite the opposite. The correlation between cryptocurrency and the Nasdaq is approximately 75%.

In Eisman’s view, cryptocurrency is simply another speculative investment. He argues that there is no reliable research or data to support the claim that it is a viable and effective investment strategy.

In conclusion, Eisman dismisses cryptocurrency as a tool for speculators, rather than a legitimate investment option. He advises investors to conduct thorough research and exercise caution when considering high-risk investments in Bitcoin, cryptocurrency, or digital assets.

It is crucial for individuals to understand that their transfers and trades in the crypto market are at their own risk, and any losses incurred are their own responsibility. The Daily Hodl, where this article is published, does not provide investment advice nor endorse the buying or selling of cryptocurrencies.