Paul Tudor Jones Says 5% of Portfolio in Bitcoin; A Store of Wealth the Same as Gold, Cash, and Commodities
Paul Tudor Jones says “Go All-In” and “Buy Crypto”, Gold & Commodities if Fed Doesn’t Create A “Taper Tantrum” This Week
Legendary investor Paul Tudor Jones who called Bitcoin the “fastest horse” and was one of the first prominent investors to jump in on the cryptocurrency is now recommending 5% of a portfolio in the crypto asset.
To him, it is a way to “protect my wealth” as “over time it’s a great diversifier.”
“I look at bitcoin as a story of wealth. I look at crypto as a story of wealth. Others will argue this is a different ecosystem. It’s transactional in nature.”
Jones' bullish comments on Bitcoin came during his interview on CNBC’s Squawk Box where he talked about inflation and how the Federal Reserve is handling monetary policy.
“You wonder why Bitcoin has a $2 trillion market cap and gold is at $1,865 an ounce. And the reason is that you have this dichotomy and policy that again questions the institution's credibility.”
The hedge fund manager is paying close attention to this week’s Fed two-day policy meeting, which is scheduled to conclude Wednesday, in the light of recent higher consumer prices.
“If they treat these numbers… 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.”
“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.”
This is because transitory inflation doesn’t work for him, that is not how he sees the world.
In contrast, “taper tantrum” would mean correction but “that doesn’t necessarily mean it’s over,” added the founder and chief investment officer of Tudor Investment Corp.
A Great Portfolio Diversifier
According to Jones, the crypto asset is a great portfolio diversifier and he prefers 5% of his portfolio in it just like cash, gold, and commodities.
“I like bitcoin as a portfolio diversifier. Everybody asks me what should I do with my bitcoin. The only thing I know for certain is I want 5% in gold, 5% in Bitcoin, 5% in cash, and 5% in commodities. I don't know what I will do with the other 80%. I want to wait and see what the Fed will do because what they do will have a big impact.”
When asked about his stance on cryptocurrency, the billionaire investor likened Bitcoin to math, saying:
“I like the idea of investing in something that is reliable, consistent, honest, and 100% certain.”
It is Bitcoin’s mathematical certainty that has appealed to him as it is in contrast to the unpredictability of the central bank’s policy which has the involvement of the human element.
“Bitcoin has appealed to me because it is a way for me to invest in certainty. Again, I look at the difference between the Fed of 2013 and the Fed of 2021. I look at the difference between Trump and Biden. Do I want to have faith in that same reliability and consistency of human nature and the linear nature of human nature which we know is anything but that?”