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“If I am forced to forecast, my bet is it will be Bitcoin.” – Paul Tudor Jones.
It looks like Bitcoin, and maybe Ethereum and other Crypto, are back in fashion again. I see the talk on twitter and reddit has increased dramatically with Bitcoin back at $10k. Now we have the famed macro investor Paul Tudor Jones buying some Bitcoin as a hedge. He seems to have bought futures, though we don’t know the exact details of the transaction, or the amount.
Paul Tudor Jones is one of the most famous traders in the world. His fund has around $10 billion in assets under management and Jones himself has an estimated net worth of nearly $5 billion. He shot to fame in the 80s when he successfully predicted the Black Monday crash in 1987. Jones became a trailblazer in the area of global macro investing and was a big reason behind the meteoric rise of the hedge fund industry.
Another popular traditional markets macro investor, Mike Novogratz, has also gone all in on Bitcoin and Ethereum.
At the beginning of the Coronavirus outbreak he said the stock market today is reminiscent of the one in early 1999. “We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination,” Jones told CNBC’s Squawk Box. “It reminds me a lot of the early ’99.” When asked if he wants to get off the train in the bull run, Jones said, “Not really. The train has got a long, long way to go if you think about it.” He said the thing to derail the bull market could be the outbreak of the coronavirus.
I wonder what he thinks now that we have millions unemployed, an economy in shambles, and a market back at all time highs. I personally think this market, and the people buying, are totally unhinged from the reality of the situation. We are all in denial and just want things back to 6 months ago…
Here is the full article from Forbes
Citing a letter to investors, Bloomberg broke a story earlier today that hedge fund luminary Paul Tudor Jones had purchased “a low single-digit” amount of bitcoin with his fund, Tudor Investment Corporation. This is partly true; Jones has taken a position in bitcoin through his nearly $40 billion hedge fund.
Only he didn’t buy the bitcoin directly on the spot market—he went through the derivatives market.
As CoinDesk market reporter Zack Voell clarifies, Jones is actually buying bitcoin futures, though it’s not clear whether these are cash-settled or physically-settled (in bitcoin), he points out. Moreover, Voell writes in the post that Jones (subjectively) ranked bitcoin in his letter as the worst safe haven when compared to financial assets, gold and cash (in that order).
Still, in the same letter he espouses a belief that bitcoin will play a “growing role” as a hedge asset during the incipient economic crisis. “The Great Monetary Inflation,” as he calls it in the eponymous post, will be “an unprecedented expansion of every form of money unlike anything the developed world has ever seen.”
Jones likened buying bitcoin to “owning the fastest horse” in the impending inflationary race ahead, stating, “If I am forced to forecast, my bet is it will be Bitcoin.”
“Bitcoin reminds me of gold when I first got into the business in 1976,” he continued later in the letter.
His choice to buy derivatives instead of real bitcoin notwithstanding, Jones’ entry into bitcoin’s market is still a bullish indicator, and it may especially resonate with older investors who recognize the investing stalwart’s name.