Hedge fund manager Paul Jones was first publicly bullish on Bitcoin in 2020 and has since kicked off a bull market. In a recent interview with CNBC, he said that he has never held an asset for such a long time. He emphasized: "This is a great story. This is the only thing that all human beings can control the supply of. I will always firmly hold it. Bitcoin, it’s going to be a small part of my portfolio.”
Who is Paul Tudor Jones?
Legendary investor and large Wall Street hedge fund manager Paul Jones became famous in 1987 when he successfully predicted the global stock market crash (Black Monday). The investment institution he founded, Tudor Investment, also achieved excellent performance in the 2008 financial tsunami.
In a letter to investors in May 2020, Tudor Investment mentioned that Bitcoin would be a dark horse in his opinion. Since then, he has often commented on Bitcoin and emphasized that Bitcoin accounts for part of his diversified investment portfolio.
(Talk about Bitcoin for the first time:Wall Street institutions mentioned Bitcoin 47 times, how did Paul Jones convince investors? )
Paul Jones' Bullish reason 1: the interest rate hike to fight inflation is over, and he is optimistic about the stock market going higher
When asked about his views on interest rates, Paul Jones pointed out that the Fed's series of interest rate hikes has come to an end, and the CPI has been lowered for 12 consecutive months, which has never happened in history.
He sees the current market landscape as similar to the mid-2006 run-up to the 2008 financial tsunami, when stocks rallied for more than a year or so after the Fed stopped monetary tightening.
I think stocks will continue to rise this year, especially after a sluggish trading cycle with plenty of cash to throw. I'm not crazy Bullish, it's going to be a slow process.
He also mentioned that the US debt crisis may lead to market turmoil, but he will take advantage of this to enter the market on dips.
Paul Jones Bullish Reason #2: Productivity enters the next phase
Paul Jones pointed out that the recent adoption of AI and large-scale language models will usher in a boom in global productivity. Such productivity miracles have appeared in the past after World War II. The United States recovered rapidly from the economic depression and the overall productivity increased significantly.
As well as the popularization of personal computers in the 1980s and the development of the Internet in the 1990s, productivity has improved a notch in these periods. Paul Jones believes that large-scale language models such as AI may bring productivity growth of 1.5% per year in the next five years.
He also emphasized that the annual growth rate of the stock market during the above-mentioned period has reached more than 15%, inflation, lower interest rates, and rising price-earnings ratios, all these signs make him Bullish on the future of the stock market.
Paul Jones: Hold Bitcoin Firmly
Paul Jones described it in his first bullish argument for Bitcoin in 2020:
At the end of the day, the best strategy for maximizing profits is to own the fastest racehorse, and if I had to make a prediction, I'd bet it would be Bitcoin.
When the host mentioned Bitcoin, Paul Jones suddenly laughed and said:
I have never sat on a horse for so long.
He emphasized that he made it clear from the beginning that he would invest a small amount of money in Bitcoin:
I'm going to vote a little because it's a great story, it's the only thing that all of humanity can control the supply of, and I'll always be steadfast in bitcoin, it's going to be a small part of my portfolio.
So will Paul Jones buy some more bitcoins? He said that he is also concerned about gold, which has performed well in the recent crisis, but Bitcoin still has regulatory issues, and the United States has a complete regulatory system to deal with Bitcoin.
And compared to his argument that inflation is over, he is not so optimistic about the trend of Bitcoin. He concluded:
Before the rise of AI in six months, before the productivity is expected to increase significantly, I may have a completely different argument, but assuming that there is indeed a slight inflation now, then you have to doubt the game of entering gold and bitcoin to hedge against inflation in the near future It's over.
