March 28, 2024

Billionaire Paul Jones Explains Why Investing in BTC

Billionaire Paul Jones Explains Why Investing in BTC

The crypto community hasn't heard of Paul Tudor Jones before, but prices have risen to $10,000, probably thanks tothe latter’s statement on multi-billion dollar investment in Bitcoin (BTC).

Development team, financialCryptocurrency professionals, speculators and generalists alike were cheered as the famed billionaire macro investor announced that his fund would invest in Bitcoin.

In a market outlook letter entitled'Great Monetary Inflation' Jones said his Tudor BVI fund could hold an amount of funds in Bitcoin equal to a "low percentage" of cryptocurrency futures.

The wider community certainly rejoicednews and sent the price of Bitcoin above $10,000 in a wild overnight rally, with some leading crypto analysts already dubbing Mr. Jones' entry into the Bitcoin club a "big deal."

Here are three reasons from Jones himself why he decided to invest in bitcoin.

Second gold

Mr. Jones draws an analogy between bitcoins andgold in the mid-1970s. This was the period when the yellow metal first appeared on the futures market. The yellow metal had tripled its prices earlier in the bull market, but two years after the launch of the futures, it was corrected by more than 50%.

The Bitcoin price chart reminded Jonesgold chart. The cryptocurrency grew exponentially ahead of the launch of its first futures contract in January 2018. But later it adjusted to 80%.

Billionaire Paul Jones Explains Why Investing in BTC

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Spot gold rate after crash in 1977year quadrupled over the next three years, surpassing its previous highs. Mr Jones said the same thing is happening to Bitcoin now after it bottomed out in December 2018. Its move above $10,217,000 is part of a larger rally.

Haters simply don’t understand Bitcoin.

Mr. Jones saw the growing role of bitcoin inmacroeconomic space, especially in the face of the collapse of the financial market caused by Coronavirus. His views contradicted what legendary investor Warren Buffett said about cryptocurrency.

"Rat poison squared,&#8212; said the head of Berkshire Hathaway in May 2018 about the value of Bitcoin, adding &#8212;"Bitcoin has no use case."

Two years after these statements, the foundation of Mr.Buffett reported a loss of $49.7 billion in the first quarter of 2020. The financial giant was forced to admit it was wrong about its heavy investment in airlines, the sector hit hardest by the pandemic.

Without tagging anyone in particular, Mr. Jones noted,that investors should simply own the asset with the best performance, without focusing on the semantic component. Otherwise, they risk being left on the sidelines because they thought they were smarter than the market.

“At the end of the day, the best strategy is to maximize profits &#8212; own the fastest horse", &#8212; Jones noted succinctly.

Not the best = has growth potential

Meanwhile, Mr. Jones was discussing the characteristicspreserving the value of bitcoin by comparing them with traditional assets. He noted that cryptocurrency has the lowest score in terms of purchasing power, reliability and liquidity.

Billionaire Paul Jones Explains Why Investing in BTC

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At the same time, the investor praised Bitcoin for better mobility compared to financial assets, paper money and gold:

&#171;Bitcoin had a rating below almost 60% offinancial assets, but its market capitalization is 1/1&#8217;200 of these assets. Bitcoin is valued at 62% of gold as a store of value, but has a market capitalization that is 1/60th of gold's outstanding value. There's something wrong here and I think it's the price of Bitcoin.

However, Jones stated that the market capitalizationBitcoin could rise sharply after the launch of Facebook's Libra or the digital yuan. This will bring Bitcoin into the consciousness of more people, which will ultimately lead to increased purchasing power and reliability of the cryptocurrency.

It is worth noting that Tudor BVI manageswith nearly $22 billion in assets, and investing just a few percent of the fund's assets in Bitcoin could raise the price by hundreds of dollars, and, more importantly, pave the way for numerous other players of similar scale to enter the market.

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