Hedge fund manager Paul Tudor Jones expects strong inflation in the US dollar in the medium term and therefore sees Bitcoin as the best possible store of value for investment strategies. BTC increasingly reminds him of the role gold played in earlier inflationary periods.
Paul Tudor Jones may be rather unknown in Germany, but in the USA the 65-year-old is one of the best-known hedge fund managers. And this Paul Tudor Jones sees the emerging economic crisis caused by the corona virus as a compelling argument for investing capital in Bitcoin (BTC). “The best strategy for maximizing profits is to own the fastest horse,” Jones writes in a letter to shareholders of his investment funds, as reported by the business news agency Bloomberg. Overtitled, his plea for Bitcoin is “The Great Monetary Inflation,” in which he calculates that since February central banks have put Fiat worth nearly 4 trillion dollars into circulation, which is equivalent to about 6.6 percent of the global economy. It is therefore predictable: As in the 1970s, there will be a wave of inflation and Fiat will be a poor store of value. His advice: buy Bitcoin to protect yourself.
Background on Paul Tudor Jones and his arguments for BTC
The Tudor Group, founded by Jones, manages around 8 billion US dollars in customer deposits. It has earned a reputation for predicting negative developments in the global economy on “Black Monday” in 1987 and the Japanese crisis since 1990, and thus for generating substantial profits against the trend. In the matter of Bitcoin, Paul Tudor Jones is said to have made a financial commitment as early as 2017 and then realized large profits shortly before the all-time high from the turn of the year to 2018. With an estimated private fortune of 5 billion US dollars, Jones is one of the super-rich Americans.
The current situation, dominated by the corona crisis, reminds him of his beginnings as an investment manager, writes Jones. When the oil market went crazy in the 1970s, speculation bubbles burst and the unemployment rate exploded, not only the USA experienced inflation rates of 20 percent. Those who switched their assets into gold at that time were not only on the safe side, but were even able to enjoy profits.
According to Jones, such a development will be repeated in the coming years, because the central banks will no longer be able to catch the inflation coming from the freshly printed money through monetary policy. After a thorough examination, however, he no longer sees gold as the first choice for hedging, but Bitcoin. According to Jones, BTC meets four criteria: purchasing power, trustworthiness, liquidity and mobility. In addition, the global impact of the corona virus is accelerating the digitalization of money. “I’m not a blind fan of hard currencies or crypto-currencies,” says Jones, summarizing his thoughts. But his analysis suggests that the Tudor Group should invest heavily in BTC and Bitcoin Futures.
In addition to BTC, he also gives an optimistic forecast for gold and predicts a price jump to at least USD 2,400 with potential up to USD 6,400. Currently, the troy ounce of gold is quoted at a good USD 1,700. The comparison of Bitcoin with gold as a store of value is widespread; the German Bayerische Landesbank, for example, uses this analogy in its calculations to arrive at a BTC price of USD 90,000 in the region as late as 2020.
Conclusion: Bitcoin Halving and Coronakrise – Bitcoin establishes itself in the mainstream
Hedge fund managers often miss the mark with their forecasts, and the psychology of markets and monetary policy is a broad field. Nevertheless, Paul Tudor Jones’ clear statement proves that Bitcoin is increasingly finding its role in classic investment strategies. The incentive: to avoid the considerable inflation risks in Fiat, Jones also expressly emphasizes the Bitcoin Halving, which is due on May 12, as a brake on inflation. Bitcoin, with a maximum amount of 21 million BTC, is the only widespread commodity for investments whose quantity is limited, Jones writes factually correct. In this respect there is no way around BTC to secure and increase assets. In other words, anyone who still holds savings accounts in euros or US dollars is probably making a historic mistake. Meanwhile, the BTC price is climbing steeply towards USD 10,000 and demand is exceeding supply at these prices.
Best place to buy Bitcoin: