One of the most successful stock traders is taking his shot at “digital gold.”
In a Thursday morning market outlook note titled “The Great Monetary Inflation,” hedge fund manager Paul Tudor Jones announced his Tudor BVI fund would hold a small percent of Bitcoin futures in its portfolio as a hedge against the prospect of the dollar inflating as skyrocketing federal debt threatens its strength.
“The best profit-maximizing strategy is to own the fastest horse,” Jones, the founder of Tudor Investment Corporation, wrote. “If I am forced to forecast, my bet is it will be Bitcoin.”
Future contracts are trading instruments that allow investors to bet on the future price of an asset. Bitcoin is a digital currency that is produced through a giant network of computers that work together to certify transactions on a public ledger known as the blockchain. Computers, or miners, are rewarded with small amounts of bitcoin for confirming transactions on the blockchain.
Bitcoin, which almost reached $20,000 a coin in November 2017, is approaching a historic moment as the rewards doled out to participating miners will be slashed in half, known as “the halving,” on Friday, May 22. The move will result in a lower supply of the coin, which has led analysts to argue over how it will affect the price, which currently sits above $9,500.
Jones is revered in the trading world and tripled his money in one day by betting against the markets during the Black Monday market collapse in 1987.
