A billionaire and wildly successful trader has just given Bitcoin a rather large endorsement. Paul Tudor Jones said the cryptocurrency is this generation’s gold, according to a report in Bloomberg.
Paul Tudor Jones
Jones reportedly told clients that Bitcoin can serve as a hedge against central bank policy. The Bitcoin community on Twitter seems to have taken the news as proof that the trader is hoarding actual Bitcoin. However, that doesn’t appear to be quite the full picture.
Bitcoin Is a Great Hedge Against Inflation, Says Jones
Paul Tudor Jones is optimistic about Bitcoin’s future. The legendary Wall Street trader believes that Bitcoin would serve as a fitting hedge against inflation.
In a client note seen by Bloomberg entitled ‘The Great Monetary Inflation’, the billionaire wrote that Bitcoin reminded him of gold. He made the case that it will be this generation’s protection against the rampant money printing of central banks in response to the coronavirus pandemic.
He wrote:
If I am forced to forecast, my bet is it will be Bitcoin.
According to Jones, his Tudor BVI fund also has exposure to Bitcoin futures. He claims it holds up to a low single-digit percentage of the contracts.
Jones was one of the first well-known hedge fund managers, having started Tudor Investment Corporation in 1980 at the age of 25. He made a name – and a substantial return — for himself by correctly calling the 1987 crash and then shorting Japanese equities a couple of years later just before that market collapsed.
He has since become an elder statesmen of sorts for the hedge fund world and his philanthropic endeavor, the Robin Hood Foundation, boasts finance titans and celebrities on its board.
Bitcoin reminds Jones of gold in the 1970s, according to the letter. Through the early 1970s, gold experienced an acute rally from $35 per ounce in 1971 to a peak of $180 in late 1974.
Jones’ statement comes amid a new all-time high in CME bitcoin futures open interest, which nearly reached $400 million on Wednesday, according to Skew. Bitcoin also rallied nearly 10% on Thursday, climbing from $9,000 to just below $10,000 at the time of publication.
It’s Bullish, but Let’s Not Go Too Far
Naturally, the Bitcoin community on Twitter has lost its mind over the news. Many of the biggest proponents of the cryptocurrency seem to have taken the news and run with the narrative they’d like to hear.
Anthony Pompliano of Morgan Creek Digital tweeted :
Bang Bang …. Paul Tudor Jones buys Bitcoin.
Welcome the the party ? pic.twitter.com/XWcpUthmtV
— Pomp ? (@APompliano) May 7, 2020
Satoshi Nakamoto Institute founder Pierre Rochard went one further than Pompliano. He claimed that the endorsement “marks the beginning of the end for fiat” currency.
They were not alone either. Many others left out a rather important detail in their re-reporting. Paul Tudor Jones said he has exposure to Bitcoin futures, not Bitcoin.
Calling herself “the annoying person” who’s going to say it, CoinShares Chief Strategy Officer Meltem Demirors highlighted the above distinction. She tweeted:
Paul Tudor Jones isn’t ‘buying bitcoin.’ He’s buying a CME Group futures contract that’s cash settled and tracks the price of Bitcoin. There’s a difference..
i’m the annoying person who’s going to say this, but…
Paul Tudor Jones isn’t “buying bitcoin.” he’s buying a @CMEGroup futures contract that’s cash settled and tracks the price of bitcoin. there’s a difference.
either way, it’s huge validation!https://t.co/koE7PvEASV
— Meltem Demirors (@Melt_Dem) May 7, 2020
However, she did go on to state that it was still a huge validation for Bitcoin.
The Bitcoin price had been in a steady uptrend since Monday. The news of Jones’ interest in Bitcoin coincided with a particularly sharp surge in price. However, it’s not immediately clear whether the revelation caused the sudden increase in buying pressure or if the pump is just another example of the volatility synonymous with Bitcoin.
May 2020 BVI Letter – Macro… by CoinDesk on Scribd
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Source: Beincrypto / Coindesk