In a recent interview with CNBC, billionaire hedge fund manager and legendary investor Paul Tudor Jones laid out his bullish stance on bitcoin amid rising global tensions and economic uncertainties.
Jones, an influential figure in the investment world, highlighted He called the current geopolitical environment one of the most “threatening and challenging” he has ever witnessed and emphasized the importance of diversifying investment portfolios with assets like bitcoin and gold.
Jones told CNBC: “I love gold and bitcoin together. “I think they probably take on a larger percentage of their portfolio than they would (historically) because we’re going to go through a challenging political time here in the United States and obviously we have a geopolitical situation.”
Now is the time to buy bitcoin and gold
Recent world events have exacerbated these feelings. Over the weekend, the Israeli government launched a military response against Hamas following an attack on Israel, raising tensions in an already fragile Middle East region. Furthermore, the recent Russian invasion of Ukraine and the growing discord between China and the United States have further shaken global markets and economies.
At the same time, Jones highlighted the alarming fiscal situation of the United States, stating that it is “probably in its weakest fiscal position since World War II.”
In response to concerns about the potential impact of high interest rates on bitcoin, Jones delved into the dynamics of gold and market operations that precede a recession. He stipulated: “I think, relatively speaking, what has happened to gold has clearly been suppressed. But you know that we will most likely enter a recession or not.”
Jones highlighted some characteristics of recessionary trading environments, stating: “There are some pretty clear recessionary trades. The easiest are: the yield curve becomes very steep, the housing premium moves to the bottom of the debt market and 10, 30 and 7 year securities, the stock market normally, just before the recession, falls about 12%.” This decline, according to Jones, is not only plausible but will probably occur at some point.
Furthermore, he emphasized the possible bull market for assets like bitcoin and gold during economic downturns, stating: “And when we look at the large short positions in gold, more likely or not in a recession, the market is usually very long; assets like bitcoin and gold.”
Jones further forecast a substantial influx into the gold market, speculating: “So there will probably be $40 billion worth of gold purchases at some point between now and when that recession actually happens.” Expressing his asset preference amid the aforementioned conditions, Jones concisely noted, “So, I like bitcoin and I like gold right now.”
Jones’ endorsement of bitcoin is not new, as the investor had previously defended the digital currency in several interviews, citing its potential as a hedge against inflation and praising its immutable mathematical properties.
He once commented: “bitcoin is mathematics, and mathematics has been around for thousands of years.” In mid-2021, Jones even increased his bitcoin allocation from 1% to 2%, labeling it a “bet on certainty amid uncertain economic conditions.”
Jones’ comments came at a time when the cryptocurrency has seen an approximate 63% rise so far this year, making it the best-performing asset in 2023.
At press time, bitcoin was trading at $27,116, down about 2% in the last 24 hours. Amid the recent price decline, btc initially found support at the 200-day EMA (blue line), which bulls should hold at all costs to avoid further downward momentum.
Featured image from iStock, chart from TradingView.com
