Billionaire investor Paul Tudor Jones has just said that inflation is inevitable, adding that his strategy was to invest in assets like gold and Bitcoin—not fixed-income investments.
He thinks the only way to escape this debt crisis is by inflating the economy.
Tudor Jones Embraces Bitcoin as Inflation Hedge
Billionaire investor Paul Tudor Jones disclosed that he is buying Bitcoin and gold against the rising tide of inflation, which he said will be vital to overcoming the debt crisis. He says, “Do not hold bonds.”
Jones’s plan reflects a growing unease over what fate will befall traditional finance and the possibility that cryptocurrencies like Bitcoin might serve as a store of value.
JUST IN: Billionaire Paul Tudor Jones says “I’m long gold, I’m long #Bitcoin.” pic.twitter.com/5xn9vCYWNI
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As part of his hedge against this scenario, Jones stays away from bonds and instead focuses on inflation-proof assets.
Speaking at the CNBC Squawk Box, he stated:
“All roads lead to inflation. I am long gold. I am long Bitcoin. I own zero fixed income. To get out of this [debt problem], the playbook is to inflate your way out.”
Earlier in 2023, Tudor Jones was less optimistic about Bitcoin. He cited regulatory and monetary pressures as potential hurdles for the cryptocurrency. Bank of America may partially agree with him since it recently recognized Bitcoin’s growing acceptance but favors gold over bonds as a safe haven.
Geopolitical Risks and US Debt Fueling Bitcoin Bet
Paul Tudor Jones has been a proponent of Bitcoin since May 2020, recommending an allocation of 1%- 2% of a diversified portfolio to the cryptocurrency. He has occasionally tossed around the idea of increasing this kind of portfolio allocation up to 5% based on individual risk appetites.
Currently, Jones cites geopolitical risk, especially from events occurring in the Middle East, Ukraine, or Taiwan, as a critical factor to consider regarding the demand for assets like Bitcoin in a portfolio for hedging purposes against uncertainties in traditional markets. He is also worried about US debt levels, which, he has stated, have hampered his investment in stocks.
Arthur Hayes, the co-founder of BitMEX, certainly thinks so. Recently, he said the price of Bitcoin is going to soar precisely because of the current geopolitical tensions and their impacts on the economy.
On the other hand old gold bug and renowned economist Peter Schiff is totally against the Bitcoin as an investment. He even predicted that MicroStartegy’s MSTR stock could eventually crash because the company relays on BTC so much.
be it as it may, Tudor Jones characterized today’s global environment as one of the most perilous he had ever seen, indicating that the US fiscal situation was the weakest since World War II. Thus, Jones wanted to be long assets such as Bitcoin and gold, concerned that higher US interest rates could foster a vicious circle of higher debt and greater economic instability.
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