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Billionaire investor Paul Tudor Jones sees cryptocurrency as a hedge against inflation and said, “It would be my preferred one over gold at the moment.” The founder of hedge fund Tudor Investment Corp. said in an interview on CNBC that he prefers crypto assets over traditional hedges like gold; as such, he has “crypto in single digits in my portfolio.” Back in June, Jones had said that Bitcoin is a great way to protect his wealth over time, calling it the world’s biggest store of wealth.
“We're moving into an increasingly digitized world.” “Clearly there's a place for crypto, and clearly it’s winning the race against gold at the moment.”
The precious metal, which is a traditional safe-haven asset is only up 3.08% this month but down 5.92% this year so far. Bitcoin, meanwhile, has spiked 50% in October to hit a new all-time high on Wednesday at $67,000 and recorded 126% gains YTD. Jones also called cryptocurrency “the single biggest threat to financial markets.” The latest rally came amidst the launch of the first US bitcoin-linked exchange-traded fund. In just two days, ProShares Bitcoin Strategy ETF has amassed over $1 billion in assets. But much like the crypto community, Jones said he would rather own Bitcoin itself than the futures-tied ETF. Still, the ETF will do just fine, said Jones adding, investors should “take great comfort” that it’s been approved by the U.S. Securities and Exchange Commission (SEC). The crypto bull also talked about being worried about inflation which he said poses a major threat to the US financial markets and the recovering economy. To Tudor Jones, inflation is not transitory, as Federal Reserve Chairman Jerome Powell has been saying. Last week, data from the Labor Department showed that the consumer price index rose 0.4% from August and 5.4% from the prior year, the largest annual gain since 2008. But Fed economists still predict inflation to be back under 2% next year, according to the minutes from last month’s Federal Open Market Committee (FOMC). This is “absolute death” for the traditional portfolio structure of 60% stocks and 40% bonds, said Tudor Jones, adding, the Fed’s current monetary policy is the most inappropriate and that Powell may not be the best person to run the central bank right now.