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Paul Tudor Jones Buys Bitcoin As “Hedge Against Central-Bank Money Printing”

Courtesy of ZeroHedge View original post here.

The unprecedented monetary stimulus unleashed by the Federal Reserve to help combat the economy-destroying coronavirus has revived worries about a hyperinflationary future where the dollar is worthless and popular inflation hedges like gold rule the day.

Adding even more clout to this thesis, on Thursday, famed macro investor Paul Tudor Jones said he's buying Bitcoin as a hedge against the inflation he sees emerging from the Fed's money-printing, even telling clients that bitcoin reminds him of "the role gold played in the 1970s".

PTJ is betting on bitcoin because he believes the best profit-maximizing strategy is to "own the fastest horse," according to Bloomberg, which cited a note to clients recently authored by PTJ, which he titled "The Great Monetary Inflation."

"If I am forced to forecast, my bet is it will be Bitcoin."

Jones said his Tudor BVI fund may hold as much as a low single-digit percentage of its assets in Bitcoin futures.

Jones isn't the only one worried about the long-term ramifications of the Powell Fed's actions.

Morgan Stanley expects the Fed balance sheet to hit $12 trillion by the end of 2021, nearly 3x its pre-corona peak.

Notably, PTJ's play comes one week before 'the halving', an event that typically leads to an appreciation in the price of BTC/USD. Here's a popular stock-to-flow model that HODLers use to forecast the price jumps typically precipitated by the quadrennial event (find more on that here)

If you are not familiar with the Stock-to-Flow model, we highly recommend reading the original article explaining the background and terminology.

And for those who might be unfamiliar with PTJ's reference to "gold in the 1970s", the FT recently published this column exploring how the central banks' untrammeled money printing could spark an inflationary tidal wave and the return of 1070s-style "stagflation".

 


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