Prominent hedge fund manager Paul Tudor Jonesâ€™ understanding of bitcoin has come into question since he only invested about 1% of his assets in the cryptocurrency. According to the CEO of Microstrategy, the Nasdaq-listed company that recently invested almost half a billion dollars in bitcoin, Jones would have invested much more if he had really understood bitcoin.
Paul Tudor Jones Wouldâ€™ve Invested More in Bitcoin
In an interview withÂ Stephan Livera, published Monday, Microstrategy CEOÂ Michael SaylorÂ shared his thoughts on how his billion-dollar company adopted bitcoin as its primary treasury reserve asset. The Nasdaq-listed company recently purchased a total of 38,250 bitcoins at an aggregate purchase price ofÂ $425 million.
During the podcast, he had a message for the billionaire hedge fund manager Paul Tudor Jones who revealed in May that he invested between 1%-2% of his assets in bitcoin as a hedge against inflation. Like Saylor, Jones was previously a bitcoinÂ skeptic. However, â€œcovid happenedâ€ and â€œthe great monetary inflation happened,â€ making him rethink his investment position going forward, he told CNBC in May. â€œThatâ€™s really what tripped my interest in bitcoin.â€ The founder of asset management firm Tudor Investment Corporation compared bitcoin to the gold trade back in the 1970s, calling it â€œthe fastest horseâ€ in this environment.
â€œBitcoin, I think is a great speculation â€¦ I have just over 1% of my assets in bitcoin, maybe itâ€™s almost two, that seems like the right number right now,â€ Jones said. He shares Saylorâ€™s sentiment about cash losing its value.
While admitting that an investor, like Paul Tudor Jones, putting 1% of his assets into bitcoin is a good thing, Saylor argued that from his point of view:
I just canâ€™t see how you could say that you understand bitcoin and then at the same time say youâ€™ve decided to speculate in it or that youâ€™re putting 1% of your wealth in it.
To illustrate his point, he gave an example that if a billionaire is interested in Vegas and really understands it, he would be like Howard Hughes and buy all of Vegas, not just spend some money gambling in a week. Saylor elaborated:
What I would say to Paul Tudor Jones is if you really understand bitcoin and you understand itâ€™s the scarcest digital asset, then you know that itâ€™s going to have a positive, real yield, 10 to 20% just based on fiat printing. If you actually dug into it to understand the technology characteristics that itâ€™s smarter, faster and stronger than gold, you would realize that itâ€™s probably a 100x to a 1000x better than gold.
â€œAnd its value is going to accrete better than just the fiat printing,â€ he continued. â€œAnd once you realize that, and if you buy into the notion that, that the Fed is going to debase the currency 10% a year for the next decade, or at least for the next five years, then 99% of the stuff youâ€™re holding is debasing by 10% a year.â€
Since Microstrategy purchased almost half a billion dollars worth of bitcoin, Saylor has beenÂ sharing his viewÂ on how bitcoin is a harder asset than gold in various interviews, including one with Morgan Creek Digital partner Anthony Pompliano and another with former Goldman Sachs manager Raoul Pal. A growing number of investors have been moving their funds into bitcoin as the Federal Reserve made a major policy shift toÂ â€œpush upâ€ inflationÂ and pledged to keep interest rates near zeroÂ for years. Mad Moneyâ€™sÂ Jim CramerÂ recently said he would buy bitcoin because he fears a â€œmassive amount of inflation.â€