While Bitcoin may continue its popularity among both consumers and cryptocurrency investors, it’s not just ordinary investors who have come around to the benefits of the cryptocurrency. Prominent investors and financial market movers are increasingly touting the benefits of Bitcoin, and increasing their investment positions in it.
One of those prominent investors who has become a Bitcoin believer is Paul Tudor Jones, a legendary hedge fund investor. He recently professed his belief that Bitcoin right now is behaving very similar to gold in the 1970s. In the aftermath of President Nixon closing the gold window in 1971, gold shot up in price over the next decade, strengthened by the stagflation that resulted from the United States’ guns-and-butter policies of the 1960s.
Bitcoin is poised now to act in a similar manner, with its price set to increase as investors treat it as a safe haven asset. Bitcoin was created as a response to the Federal Reserve’s quantitative easing that occurred during the financial crisis, with only 21 million BTC allowed to be created. So as more and more dollars are created, Bitcoin’s relative exchange value should only continue to rise.
That’s why Jones and his flagship hedge fund recently announced that the fund has taken a position in Bitcoin, in the low single digits. While that may sound like a tiny amount, consider that a hedge fund like that is often investing across asset classes, investing in stocks, bonds, exchange-traded funds (ETFs), commodities, precious metals, real estate, options, futures, etc. For the fund to invest even 1-2% of its assets in Bitcoin is a tremendous vote in favor of cryptocurrency. And with $22 billion in investments, it wouldn’t be an insignificant amount of Bitcoin either.
A 2% investment in Bitcoin would be over 45,000 BTC, while a 1% investment would be nearly 23,000 BTC. That would easily make Jones’ fund one of the Bitcoin “whales” that could move markets, especially as hedge funds want to be able to move in and out of investment positions quickly. But no one really expects Jones to move out of Bitcoin anytime soon, as he believes Bitcoin to be a great investment hedge against continued devaluation of the dollar. Perhaps that’s why the Bitcoin price is now set to move above $10,000 once again. Those who are on the fence about investing in cryptocurrency may want to follow Jones’ example and take a look at investing in Bitcoin.