Paul Tudor Jones, founder of the Tudor Investment Corporation, recently made statements railing against what he perceived as the United States Federal Reserve’s ‘transitory’ pronouncements on the status of Bitcoin.
According to Tudor Jones, Bitcoin’s current $2 trillion market capitalization was due to a “dichotomy” in Federal Reserve policy wherein the credibility of Bitcoin was put into question. As Bitcoin experiences a current consolidation period passing once again the $40,000 level, a market breakout is predicted to follow soon.
"How can you have that with an eight-year timeframe? It's almost like a split personality. And you wonder why Bitcoin has a $2 trillion market cap and gold's at $1,865 an ounce. And the reason why is because you have this dichotomy in policy that again questions — questions — the institutional credibility of something.” the billionaire investor said.
While this renewed upward swing in price can be attributed to influential tweets from Elon Musk regarding Tesla’s acceptance of BTC in future transactions if the cryptocurrency were to find more ecologically sustainable means of mining, Bitcoin’s price itself does not necessarily reflect its strength.
"Bitcoin is math and math has been around for thousands of years. I like the idea of investing in something that's reliable, consistent, honest, and 100% certain." said Jones in a recent interview. Tudor Jones made news in the previous year as the pandemic began, when he invested 2% of his portfolio solely on Bitcoin, touting the cryptocurrency as “a way to invest in certainty."
According to Tudor Jones, Bitcoin is a “reliable” hedge against inflation, given what he perceives as some of the most concerning swings in inflation data. Recently released data from the Federal Reserve reveals that current inflation rates have caused the largest price spikes in 13 years for two months in a row based on the consumer price index report (CPI).
"I like bitcoin as a portfolio diversifier and store of wealth. I want to have 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities. I don't know what I want to do with the other 80% at this point in time. I want to wait and see what the Fed's gonna do." Tudor Jones opined.
According to the billionaire, the consumer price index over which the Federal Reserve was comparing its current analyses were much lower, noting that unemployment levels and job offers today are now roughly equal. This means that the same forecast based on previous trends cannot be applied laterally for an altogether different environment.
"It's somewhat disingenuous to say that inflation is transitory — for them to say inflation is transitory," Tudor Jones added.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.