Billionaire hedge fund manager Paul Tudor Jones says he likes
bitcoin. Noting that he can trust math, the famed hedge fund manager
said, “bitcoin has appealed to me because it’s a way for me to invest in
certainty.” Jones also shared his investment strategies in response to
the Fed’s policy.
Paul Tudor Jones on Bitcoin, Fed Policy, Inflation
Paul Tudor Jones, the founder of asset management firm Tudor
Investment Corp., explained to CNBC Monday why he likes bitcoin. He
described:
I like bitcoin. Bitcoin is math and math has been around
for thousands of years. 2+2 is going to equal 4 and it will for the next
2,000 years. So, I like the idea of investing in something that’s
reliable, consistent, honest, and 100% certain. So, bitcoin has appealed
to me because it’s a way for me to invest in certainty.
“I look at the difference between the Fed in 2013 and Fed of 2021 … I
look at the difference between Trump and Biden,” Jones noted. “Do I
want to have faith and that same reliability and consistency in human
nature?”
When asked if he likes bitcoin at the current price, Jones replied:
I like bitcoin as a portfolio diversifier … The only
thing that I know for certain is I want to have 5% in gold, 5% in
bitcoin, 5% in cash, 5% in commodities at this point in time.
“I don’t know what I want to do with the other 80%,” the famed hedge
fund manager admitted. “I want to wait and see what the Fed is going to
do because what they do will have a big impact.”
A 5% allocation is a significant increase from his earlier allocation of between 1% and 2% that he revealed last year.
He further shared, “I have a defensive position in bitcoin to protect
myself, my family, and our wealth over time.” He also said he does not
look at the price of bitcoin anymore, implying that he is a hodler.
Jones also offered his views on inflation and the upcoming Federal
Reserve meeting. He said the Fed meeting this week could be the most
important meeting in Chairman Jay Powell’s career, and “certainly the
most important Fed meeting of the past four or five years.” Clarifying
why the meeting is so important, he said:
The reason why is because we’ve had so much incoming data
that challenges both their mission and their model. So how they react
to that will be extraordinarily important and I think for investors as
to how they should deal with their portfolios going forward.
Jones explained that consecutive consumer price index readings put
price pressures well ahead of the Fed’s 2% inflation goal. However, Fed
officials continue to insist that the current readings are transitory
and unlikely to persist. Jones disagreed, emphasizing that “It’s an
intellectual incongruity that risks damaging their forecasts if they’re
wrong on inflation.”
Referring to recent economic data showing higher consumer prices,
Jones said: “If they [the Fed] treat these numbers, which were material
events, they were very material, if they treat them with nonchalance, I
think it’s just a green light to bet heavily on every inflation trade.”
He further opined:
If they say, ‘We’re on path, things are good,’ then I
would just go all in on the inflation trades. I’d probably buy
commodities, buy crypto, buy gold.
On the other hand, Jones predicted: “If they course correct, if they
say, ‘We’ve got incoming data, we’ve accomplished our mission or we’re
on the way very rapidly to accomplishing our mission on employment,’
then you’re going to get a taper tantrum.” He concluded: “You’re going
to get a sell-off in fixed income. You’re going to get a correction in
stocks. That doesn’t necessarily mean it’s over.”
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