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Crypto “winning the race against gold at the moment” says Paul Tudor Jones

20.10.2021

Crypto “winning the race against gold at the moment” says Paul Tudor Jones

When it comes to looking for a hedge against continually rising inflation in many western European and North American nations, digital assets are beginning to take precedence over pretty much everything else.

It only takes a quick glance onto the comments section of any mainstream newspaper under any report about the potential and quite frankly alarming anticipated levels of inflation and it is clear to see many members of the global public glibly stating that they hold Bitcoin, Ethereum or a series of tokenized assets and that they have no concerns whatsoever.

Whether that is bravado or not is open to debate, however what is clear is that among the investing public there is a dichotomy: those who are genuinely afraid of being hit very hard should inflation rise, and those who are not because they consider themselves fully hedged.

The latter of the two are those who are holding onto digital assets as a store of value and as a means of keeping their asset base away from the mainstream, centrally controlled monetary system that is currently a cause for concern for a great many who are dependent on it.

Whilst the smart investors are hedging their risk this way, there are more high profile billionaires taking the same view.

One such hedge fund manager is Paul Tudor Jones, whose hedge fund has over $9 billion in assets under management, is a well known conservationist and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corporation, an asset management firm headquartered in Stamford, Connecticut and is one of the yardsticks of America’s wealth management sector.

Today he told CNBC during a Squawkbox interview “It would be my preferred one over gold at the moment. Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment.”

Paul Tudor Jones then divulged that he has “crypto single digits in my portfolio” referring to the percentage of his holdings in cryptocurrencies.

A strong advocate for cryptocurrency investment, and in particular Bitcoin, Paul Tudor Jones considers that crypto assets provide a very good hedge against what he considers to be a ‘very bleak’ fiscal situation, in that he considers the fast pace of price increases represents the biggest threat to both the financial markets and society in general.

To protect portfolios against higher prices, Paul Tudor Jones went on to explain that investors could look at going into commodities, inflation-indexed bonds and cryptocurrencies, such as Bitcoin.

He showed his colors by demonstrating some degree of disdain toward the Federal Reserve’s policy, saying the central bank “is an inflation creator rather than an inflation fighter.”

This line of thinking echoes Mr Tudor Jones’ thoughts back in July this year, when he said that he was nervous that the Federal Reserve had not moved quickly enough to address problematic inflation, warning at the time that its insistence that recent price spikes are only temporary was “disingenuous” and telling investors to double down on defensive investments like cash, commodities and Bitcoin.

At that time he said “The only thing I know for sure is I want to have 5% in gold, 5% in bitcoin, 5% in cash and 5% in commodities.”

Now, three months later, many investors are also heading toward crypto and the supply chain-related inflation has taken place, with researchers saying that the cost of utilities may increase by tens of percent in 2022.

Clearly the old-school monetary system is not where the clever money is, nor is it where the confidence is and those with an analytical mind, Paul Tudor Jones included, are going the crypto route.