- Stan Druckenmiller has said that crypto could benefit from central banks’ actions
- The billionaire told CNBC that trust in central banks could be eroded if they end up dumping countries in recession
- Druckenmiller has sold his bitcoin, but seems to be sticking to his 2020 ethos over Bitcoin
Billionaire investor Stan Druckenmiller has said that cryptocurrency will have a “big role in a renaissance” because people no longer trust central banks. Druckenmiller, who in 2020 said he saw Bitcoin as a hedge to inflation, told CNBC on Wednesday that he would be “stunned” if the U.S. wasn’t in a recession by 2023, by which point the finger would be firmly pointed at the country’s financial overlords, leading to an erosion of trust in their ability to manage the economy and a rise in interest of cryptocurrencies.
Central Banks Risking Erosion of Trust
Druckenmiller predicted the current inflation crisis back in 2020 and told CNBC that “if the gold bet works, the Bitcoin bet will probably work better”, adding that he owned “a tiny bit” of Bitcoin due to its higher risk/reward nature. In truth, neither bet has played out yet, with both gold and Bitcoin taking a hammering as the economy has been gripped by an inflationary crisis due to a number of unprecedented factors.
Druckenmiller reprised his role as crypto advocate yesterday when he told CNBC’s Delivering Alpha conference that the actions of central banks over the past two years will lead to an erosion of trust in them. Druckenmiller opined that the U.S. was staring down the barrel of the first recession since the 2008 financial crisis, an episode that didn’t influence Bitcoin’s creation but proved why it was needed.
Druckenmiller Has Sold His Bitcoin
The hedge fund manager pointed to the recent actions of the Bank of England, which this week was forced to steady its economy by buying £65 billion of U.K. bonds, as an example of what will happen “if things get really bad”, adding that if other central banks followed suit then it would cause uproar – which would be good for crypto:
I could see cryptocurrency having a big role in a Renaissance because people just aren’t going to trust the central banks.
However, Druckenmiller isn’t practising what he preaches, saying that he has sold his Bitcoin stash because “it’s tough for me to own anything like that with central banks tightening.” Whether this changes if his latest prediction comes true remains to be seen.