Paul Tudor Jones Advocating for Bitcoin Is a Big Deal

in LeoFinance4 years ago

Here's a guy worth $5 billion who is part of the long tradition of great investors that have come out of the University of Virginia. He's not part of Tiger Management, Julian Robertson's firm that now manages $36 billion of assets under management (AUM) or the many successful "Tiger Cubs" that he spawned. But same era, same university. It's kind of a neat little story that all this finance goodness comes out of a little bucolic town in the South. But it's true. If you've never been there, Charlottesville is a great little town. Thomas Jefferson built it as the paragon of his ideas about reinventing higher education and he did a damn good job.

Paul Tudor Jones came along a few years before the Tiger boys. He's now running about $8 billion with his Tudor Funds. What most people are talking about today as we wait for the inevitable BTC crossing of $10,000 is that Jones publicly revealed that his BVI Global Fund LP is going to start actively trading bitcoin futures, with an allocation in the portfolio as high as the upper single digits. That's quite a first step. You can read the investment letter here for now.

The reason for this public advocacy for bitcoin is clear - central bank shenanigans or what Jones is calling the Great Monetary Inflation (GMI). Those of us already head over heels into crypto already know this drill. The BTC token supply is disinflationary. There can only be 21 million bitcoin ever. That includes a couple million lost forever, never to be transacted in again. At this point, with over $3.9 trillion worth of monies created by the world's central banks in just the past month alone, the contrast has never been quite as stark as it is today between the Fed monetary policy and Satoshi Nakomoto's monetary policy. So here we have some good good confirmation bias.

John Tudor Jones is goo-goo for BTC.

He spends over 3 pages of his 10-page letter on describing his bitcoin bull thesis. It's well laid out and thoroughly researched. I honestly don't think any one could come up with too great of an argument against it. His team compared the various stores of value in the world that are accepted today. They found out that, even though bitcoin still scored last on their collective metrics, there was still some incredible disconnects that make it worth buying bitcoin.

First, Table 3 presented his team's findings:
Screen Shot 2020-05-09 at 1.30.31 AM.png

But Table 2 made clear the disconnect:
Screen Shot 2020-05-09 at 1.30.39 AM.png

Do you see it? Yeah, BTC is still 4th in terms of accepted value, but there's no freaking way that gold above ground should currently be 50x that market. None whatsoever.

His note to clients goes on to remark:

What was surprising to me was not that Bitcoin came in last, but that it scored as high as it did. Bitcoin had an overall score nearly 60% of that of financial assets but has a market cap that is 1/1200th of that. It scores 66% of gold as a store of value, but has a market cap that is 1/60th of gold’s outstanding value.

It's like, yeah, we know, "We've been trying to tell Peter Schiff this for years!" He still won't listen, despite all the evidence to the contrary.

From the looks of this meme, it'd probably do him some good to get some bitty in the wallet.

So it's interesting to note that Jones is going with BTC as his uncorrelated hedge asset instead of using gold. His filings show he had purchased a shit ton of SPY puts. He currently holds more than $88 million worth of 'em. So he likes his hedges. But you can bet he's tired of losing so much money on 'em!

So bitcoin it is.

It's one of the first big titans of finance to come out and say publicly that they're buying bitcoin. And for sure it won't be the last.

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This is a big deal. The money that is available to Wall Street makes the entire crypto sphere look like a total joke.

That said, I do not think too many join Jones in his view. Sadly, they are stuck using their old models which is going to be their downfall.

Bitcoin has the name recognition to reach many parts of society. The alt coins have the ability to put tokens in the hands of everyday people.

Ultimately, crypto is going to be required to fund future projects.

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If he's making the leap now, it's only a matter of time.