Investor Stanley Druckenmiller warns of a bubble in meme stocks and cryptocurrencies

Investor Stanley Druckenmiller, founder of Duquesne Capital in 1981, warns of great danger in the market for meme stocks and cryptocurrencies, as well as in other assets that are growing excessively.

Druckenmiller warns that a bubble is building around “crypto, meme stocks, art, wine and stocks” much larger than the dotcom bubble, he explained during the Boston Investment Conference that celebrated on November 4.

“This bubble is in everything. In all the assets on the planet,” he warned, as reported by Insider. “We turned a lot of us into geniuses in the last few years,” while the bubble of the late 1990s was “much narrower” and the enthusiasm in assets at the time was partly due to the great potential of the effects of the internet

“The Federal Reserve is inflating the bubble”

The investor also warned that the Federal Reserve’s stimulus efforts were inflating a large bubble, as he warned a few months ago. According to his theory, expansionary policies, along with high debts and deficits, endanger the long-term health of the dollar. “The problem has been clearly identified. It is Jerome Powell and the rest of the world’s central bankers. There is a lack of trust,” he said.

“I have no doubt that we are in a raging mania across all assets,” he told CNBC in May. “I also have no doubt that I have no idea when it’s going to end.”

In this sense, Druckenmiller made some statements that contradict his vision of the current state of cryptocurrencies, which he saw as a solution to the “death” of the dollar.

A short-term approach can be disastrous

The president of Duquesne Capital also put on the table the risks of concentrating investment in the short term. “Many investors live in the present, which is a disaster in the long term,” he said during the conference on November 4.

For Druckenmiller, investors should look to the near future when deciding their operations and, thus, avoid the creation of these bubbles. “Every event in the world affects something,” she noted. This is why he tries to imagine the world with a long-term view of up to 18 months, so that he can identify assets that will have a very different value than today.