Crypto is only suitable for speculation and illegal activities, according to Cliff Asness, who believes Bitcoin is in a bubble.

According to Cliff Asness, co-founder of AQR Capital Management, the recent surge in bitcoin's value, which propelled it above $100,000 following the November presidential election, indicates that the cryptocurrency is in a speculative bubble.

""To convince me to become more of a crypto person, you need to show me a practical use case for it beyond speculation and illegal activities," Asness stated on CNBC's "Money Movers" Monday."

Asness identified three uses for crypto: speculation, use in war-torn countries, and paying cyber ransom.

In 2024, Bitcoin experienced a 120% increase following a significant year-end surge, fueled by President-elect Donald Trump's election. Investors were optimistic that Trump would bring about a new era of crypto, including deregulation of the industry and the establishment of a national strategic bitcoin reserve. However, Bitcoin has since dipped 3% in the new year, trading near $90,000.

"Asness stated that there is no fundamental trend for crypto because he does not know what the fundamentals are, but there is a price trend. As a result, he believes most trend followers who have it in their universe are likely long."

Despite Asness's bearish stance on crypto, he acknowledged that its volatility makes it difficult to predict its future direction.

"Shorting crypto with high annual volatility can be scary, but we've learned the risks of concentrated shorts on a portfolio," he said.

In 1998, Asness co-founded AQR after working at Goldman Sachs. At the University of Chicago's Ph.D. program, he and his partners developed the firm's investment philosophy, which emphasized value and momentum strategies.