Hedge fund billionaire Paul Tudor Jones is sticking to his allocation in Bitcoin (BTC) because of BTC’s unique value proposition, despite the bearish price action. However, he acknowledges that the government’s aggressive stance on crypto and the rise of AI could affect BTC’s future growth, as well as the prospects of gold and Bitcoin as inflation hedges.
Trust in Bitcoin
Paul Tudor Jones, the billionaire, has declared that despite Bitcoin’s bearish price trend over the past year, he has no plans to reduce his investment in the crypto king.
In a recent interview with CNBC, the famed investor emphasized that Bitcoin is by far his longest-running investment. In May 2020, Jones revealed that he has allocated between 1% and 2% of his extensive portfolio to Bitcoin. He has indicated that he will keep these Bitcoin positions because of BTC’s unique value proposition.
“I have never been on a horse this long… From the beginning I have always said I want a small allocation to (Bitcoin) because it is a large tail event (rare event). It’s the one thing where people can’t customize the offering, so I’m sticking with it. I always stick with it. It’s just a little diversification in my portfolio,” said Paul Tudor Jones.
Concerns about Bitcoin’s future growth
Paul Tudor Jones maintains his small Bitcoin allocation, but the billionaire emphasizes that he is concerned about the potential dampening effects on BTC’s future growth due to the current government’s aggressive stance on the crypto industry. He also points out that both gold and Bitcoin’s prospects could be affected as he believes the rise of AI will cool inflation.
Jones wonders whether gold and Bitcoin will become boring in the future and argues that the inflation story may be over. The emergence of AI and the potential boost to productivity that it entails has changed his view of inflation and inflation hedges.
In the interview with CNBC, Jones expresses satisfaction with last December’s events and suggests that recent positive performance has been achieved due to the existence of risk premiums. He does speculate, however, that such achievements could become less interesting in the future.
In doing so, he points to a specific obstacle for Bitcoin in the United States, namely the resistance of the regulatory authorities. Jones notes that if inflation eases, the game of buying gold and Bitcoin as an inflation hedge may be over. He emphasizes that his view on inflation and inflation hedging six months ago, before the rise of AI and possible productivity improvements, would have been very different.
