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- In a research note, investor and billionaire Paul Tudor Jones revealed that he will use Bitcoin (BTC) as a hedge against dollar inflation.
- Jones’ announcement is likely to have caused a rally that pushed BTC above the $10,000 mark.
- U.S. Federal Reserve Chairman pledges to continue printing dollars to mitigate crisis.
In a research note published by Bloomberg, legendary macro-investor and billionaire Paul Tudor Jones reveals that he will use Bitcoin as a store of value. Jones predicts imminent inflation caused by the Federal Reserve’s “infinite money policy”. In addition, the billionaire believes that the digitalization of currencies has been accelerated by the crisis caused by the Covid-19 pandemic.
Jones’ announcement has been welcomed in the crypto community. Users and analysts have declared Jones’ announcement to be a bullish signal, as expectations rise due to Bitcoin’s halving. The first cryptocurrency by market capitalization has had a month of positive performance. At the time of publication, BTC is trading at $9,891 with gains of 3.86% in the last 24 hours. Although it has declined slightly, BTC broke the $10.000 mark yesterday, after Jones’ announcement. Overall market sentiment remains bullish.
Gold was the Bitcoin of the 1970s
According to the note entitled “The Great Monetary Inflation”, Jones said that Bitcoin has a similarity to gold during the 70s, when the investor was starting his career. During this period gold was introduced to the financial derivatives market. At the same time, gold saw an unprecedented increase in value, and then went through a correction of more than 50% in about two years. As can be seen in the following chart, gold and Bitcoin have a similar behavior and the cryptocurrency could be about to enter an upward momentum that will exceed its all-time price highs.
In that sense, Jones said he is confident that Bitcoin is the best bet, especially in the current economic situation:
The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.
Jones’ fund, Tudor BVI, is valued at $22 billion and could accumulate a percentage of up to one digit of its assets in Bitcoin futures. This would make it one of the first major funds to adopt an asset that has been generally ignored by the traditional market. Jones stressed that he considered investing in Bitcoin after taking into account the U.S. Federal Reserve’s monetary policy:
It has happened globally with such speed that even a market veteran like myself was left speechless. We are witnessing the Great Monetary Inflation — an unprecedented expansion of every form of money unlike anything the developed world has ever seen.
Federal Reserve Chairman Jerome Powell has pledged to continue the policy that the financial institution has been conducting. Powell emphasized that the priority is to mitigate the crisis caused by the Covid-19 pandemic. On an early recovery and the effectiveness of the Fed’s actions, Jones commented:
How reasonable is it to expect that in the recovery phase the Fed will be able to deliver an increase in interest rates of a magnitude sufficient to suck back the money it so easily printed during the downswing?
The investor also concluded that the Covid-19 will have an accelerating effect on the digitization of currencies worldwide. Jones stated:
I am not a hard-money nor a crypto nut. The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by Covid-19.
