On Wednesday (September 28), legendary billionaire investor\u00a0Stanley Freeman Druckenmiller\u00a0shared his latest thoughts on crypto.<\/p>\n
Druckenmiller started his career as an equities analyst at Pittsburgh National Bank. Then in 1981, he founded investment firm Duquesne Capital Management, which had a positive return every year until he decided in August 2010 to quit the hedge fund business and close his firm.<\/p>\n
According to a\u00a0report\u00a0published by the New York Times (NYT) on 18 August 2010, Druckenmiller wrote the following in a letter to investors to explain why he wanted to stop being a hedge fund manager:<\/p>\n
\u201cI have had to recognize that competing in the markets over such a long time frame imposes heavy personal costs,\u201d he wrote. \u201cWhile the joy of winning for clients is immense, for me the disappointment of each interim drawdown over the years has taken a cumulative toll that I cannot continue to sustain.<\/em>\u201d<\/p>\n Between 1988 and 2000, Druckenmiller was the lead portfolio manager for Quantum Fund, which was started by George Soros and Jim Rogers in 1973. In 1992, this hedge fund made a successful $10 billion bet against the British Pound (GBP).<\/p>\n According to the NYT report, Soros and Druckenmiller pioneered a new style of hedge fund trading:<\/p>\n \u201cWith Mr. Soros, Mr. Druckenmiller helped pioneer an investment strategy that today is referred to as macro trading. They married two different strands of investing. On one hand, the two fund managers placed large bets on global currencies and commodities by watching charts and focusing on political trends. But they also engaged in old-fashioned stock picking, researching companies through fundamental security analysis.\u201d<\/p>\n According to Forbes, the 69-year-old former hedge fund manager, who personal fortunate is estimated to be worth around $64 billion (as of 30 September 2022), is now managing his money through a family office (Duquesne Family Office LLC) that he founded in 2010.<\/p>\n Druckenmiller\u2019s latest comments about crypto while he was being interviewed on September 28 at CNBC\u2019s Delivering Alpha conference.<\/p>\n As you may remember, on that day, the Bank of England (which is UK\u2019s central bank) announced that \u201cin line with its financial stability objective\u201d it \u201cstands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses and to achieve this \u201cthe Bank will carry out temporary purchases of long-dated UK government bonds from 28 September.\u201d<\/p>\n According to a report by The Daily Hodl, Druckenmiller said:<\/p>\n \u201cI still think\u2026 if the Bank of England, what they did is followed by stuff like that by other central banks in the next two or three years, if things get really bad\u2026 I could see cryptocurrency having a big role in a Renaissance because people just aren\u2019t going to trust the central banks.<\/em>\u201c<\/p>\n Apparently, he did however point out that he does not hold any crypto at the moment since it is difficult for him \u201cto own anything like that with central banks tightening.\u201d<\/p>\n https:\/\/youtube.com\/watch?v=T1s7O40DDBQ%3Ffeature%3Doembed<\/p>\n Druckenmiller also talked about crypto while he was being interviewed on 9 June 2022 by John Collison, Co-Founder and President of Stripe, at the (virtual)\u00a02022 Sohn Investment Conference.<\/p>\n Below are a few highlights from comments Druckenmiller made about crypto during that interview.<\/p>\n On Potential Effect of Crypto on Other Asset Classes<\/strong><\/p>\n \u201cI don\u2019t know whether I\u2019m seeing it, but I expect it to. You can\u2019t take over $2 trillion in purchasing power and then take a trillion of it out and not matter. John, I also have high frequency signals, and there certainly seems to be a strong correlation between crypto and the Nasdaq.<\/em><\/p>\n \u201cI don\u2019t think it takes a genius to figure out why. So, I\u2019m looking at it as an indicator that way. Crypto, you know, everything that Charlie Munger says about it, I\u2019m sympathetic to, everything that Bill Miller says about it, I\u2019m sympathetic to.<\/em><\/p>\n \u201cI think that\u2019s a movie that has yet to be played out and one that I don\u2019t want to bet on with conviction, but I will be very surprised if blockchain isn\u2019t a real force in our economy, say 5-10 years from now and not a major disruptor with companies that will have been founded between now and then. It\u2019ll do very well, but it will also challenge things like our financial companies and do a lot of disruption.<\/em><\/p>\n