On Monday (May 11), the day on which Bitcoin is due to have its next halving event, legendary billionaire macro investor Paul Tudor Jones II (aka “PTJ”), who is the Founder and the Chief Investment Officer (CIO) of asset management firm Tudor Investment Corporation (aka “Tudor’), explained why he believes so strongly in Bitcoin.
Earlier this month, Tudor Jones made some very bullish comments about Bitcoin (as an inflation hedge) in the investment letter (“Market Outlook — Macro Perspective”) sent out to clients of the $22 billion macro hedge fund “BVI Global Fund”, which is managed by his asset management firm Tudor Investment.
Bloomberg was the first to report (on May 7) that according to this investment letter, the offering memoranda for the Tudor BVI Global Fund had been updated to disclose that Tudor Investment Corporation “may trade Bitcoin futures” for the fund and that the “initial maximum exposure guideline for purchasing Bitcoin futures” had been set to “a low single digit exposure.”
Within a few hours of this news being reported, Bitcoin had surged past the $10,000 level for the first time since February 18.
Despite the 15-minute flash crash that took the price of Bitcoin all the way down to $8,327 on Sunday (May 10), Bitcoin has managed to stage a nice little recovery since then, and — according to data from CryptoCompare — it is currently trading at $9,066, up 3.54% (against USD) in the past 24-hour period:
Many prominent members of the crypto community who have read PTJ’s investment letter seem to agree with popular macro-economist and crypto trader Alex Krüger’s assessment of the importance of this letter:
The Paul Tudor Jones letter is the single most bullish thing ever written about bitcoin, and it came from Tudor himself. I see it as a game changer. Think many macro investors will follow. Mandate changes and onboarding take time. PTJ will be on CNBC this week.
— Alex (@classicmacro) May 11, 2020
This is why CNBC’s “Squawk Box” decided to invite PTJ for an interview.
Below, we highlight the most interesting things that the Tudor CIO said about Bitcoin during this interview.
Squawk Box co-anchor Andrew Ross Sorkin asked PTJ what had changed his mind about Bitcoin (since PTJ for a long time used to be skeptical of Bitcoin).
“Well, Covid happened, and the great monetary inflation happened, and that made me begin to think about how do you want to be positioned in your portfolio going forward.
“So, that’s really what trip my interest in Bitcoin, and you have to realize if you just think about say Bitcoin versus cash, right?
“When I think of stores of value, I think of it in four ways: purchasing power; trustworthiness; liquidity; and portability…
“When it comes to trustworthiness, Bitcoin’s 11 years old; there’s very little trust in it. We’re watching the birthing of the store value and whether that’s exceeds 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.
“If you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has the goal of depreciating its value 2% per year. So you have in essence a wasting asset in your hands.
“So, Bitcoin, I think it’s a great speculation… I’ve got just over one percent of my assets in Bitcoin, maybe it’s almost two. That seems like the right number right now.
“For me, it’s not the great cure for all the monetary ills. It’s a great speculation, that’s what I would say what Bitcoin is.”