American billionaire hedge fund manager Paul Tudor Jones has recently expressed even stronger bullishness on Bitcoin. In an interview with CNBC Squawk Box, he declared the cryptocurrency the best hedge against inflation and compared investing in Bitcoin now to investing in early tech stocks like Apple and Google. "I think we are in the first inning of Bitcoin and it's got a long way to go," he said.
From 2% Allocation to Growing Conviction
Jones, founder of Tudor Investment Corp., first caught the crypto community's attention in May when he revealed he had allocated about 2% of his assets to Bitcoin. Four months later, with Bitcoin's price rallying over 46% and a wave of bullish news such as PayPal's crypto support, Jones was asked whether his investment stance had changed. He reaffirmed the reasoning behind his initial recommendation.
"Back in March and April, it became really apparent, given the monetary policy being pursued by the Fed and the incredible quantitative easing, that we were in an unprecedented time," Jones explained, noting that the pandemic forced investors to consider inflation defense. The Federal Reserve had also announced a major policy shift to push up inflation.
Bitcoin as the Premier Inflation Hedge
Jones recommended Bitcoin as an inflation trade, alongside gold, copper, the S&P GSCI commodity index, and being long the yield curve. "I came to the conclusion that Bitcoin was going to be the best of inflation trades, the defensive trades that you would take," he stated. He highlighted Bitcoin's portability, liquidity, and other characteristics that make it a great inflation hedge, while acknowledging that it previously lacked integrity and long-term staying power. "Every day that goes by, of course, it gains on that. It gains on credibility and integrity," he emphasized.
Bitcoin Mirrors Early Tech Investments
The billionaire investor admitted he initially didn't fully appreciate Bitcoin's potential. "I didn't appreciate and now I know what it must feel like to be a tech investor," he confessed, comparing Bitcoin to "investing with Steve Jobs and Apple, or investing in Google early." Jones revealed he maintains a "small single-digit investment in Bitcoin" and does not consider himself a flag bearer. However, after his May disclosure, he was "besieged" by numerous Bitcoin supporters and came to realize the cryptocurrency has "this enormous contingent of really, really smart and sophisticated people who believe in it." He described the global crowd-sourced community dedicated to seeing Bitcoin succeed as a store of value and transactional medium.
Jones said he had never seen an inflation hedge with such strong intellectual capital behind it, which makes him "even more constructive on Bitcoin." He concluded: "I like Bitcoin even more now than I did then. I think we are in the first inning of Bitcoin and it's got a long way to go."