Just last week, macro investor Paul Tudor Jones revealed that he is buying bitcoin through CME bitcoin futures contracts and sees it as a hedge against inflation.
Now, in today’s interview with CNBC, the long time hedge fund manager shared that he has almost two percent of his assets in Bitcoin.
1% in bitcoin? Missed a couple 0’s
— moon (@MoonOverlord) May 11, 2020
Economist and trader Alex Kruger deduced this almost 2% allocation to about $430 million based on Tudor BVI fund’s asset under management at $21.6 billion as of March 30.
If he allocated his personal assets, it would amount to under $100 million.
interestingly this is the CME spot month position limit (2k contracts, each with a 5x mult) https://t.co/tl0HSr2zGT
— juthica (@juthica) May 11, 2020
This “seems like the right number right now,” said Jones adding “it’s not for me, it’s not the greatest, it’s not the great cure for all the materials, it’s great speculation that’s what I would say Bitcoin is.”
Cash is a “wasting asset in your hands”
During his interview, he talked about why despite being a skeptic of bitcoin and cryptocurrencies for a long time, he changed his mind about digital assets.
What changed was COVID and the great monetary inflation. This made him think about “how you want to be positioned in your portfolio going forward. So, that’s really what trips my interest in Bitcoin,” said Jones.
Comparing Bitcoin to cash, he explained when it comes to stores of value, it’s about four things — purchasing power, trustworthiness, liquidity, and portability. He said,
“When it comes to trustworthiness, bitcoin is 11 years old and there’s very little trust in it. But We’re watching the birth of a store of value.
Whether that succeeds or not only time will tell. What I do know is that every day that goes by and bitcoin survives, the trust in it will go up.”
However, when it comes to cash, from a purchasing power standpoint,
“if you own cash in the world today you know your central bank has an avowed goal of depreciating its value, 2% per year. So, you have in essence a wasting asset in your hands.”
Bitcoin has yet to stand the test of time like gold
The world is going virtual right now, especially after the lockdown put in place all over the globe because of coronavirus. And this digitization of the world benefits bitcoin, he said.
The increasingly digitized world means Bitcoin will be that much more accessible by the universe of people that could own it as a store of value.
He explained how every single bull market has one common thread — an ever-expanding universe of people who own it.
In bitcoin’s case, there’s probably between 55 and 70 million people in Bitcoin. If you’re buying Bitcoin your bet is that number is going to go to 120 million or to 200 million.
It’s kind of hard in a world that’s becoming increasingly digitized not to think that’s happening although evidence at this point doesn’t agree to it. Jones said,
“But when I think of Bitcoin I look at it is one tiny part of a portfolio. It may end up being the best performing of all of them.”
But he’s conservative in allocation because “it has not stood the test of time, for instance, the way the gold has, which has been a store value for twenty-five hundred years.”