Paul Jones Interview: Bitcoin is the only asset that humans can control supply of, remains steadfast in holding Bitcoin

Hedge fund manager Paul Jones publicly expressed optimism about Bitcoin for the first time in 2020, which also marked the beginning of a bull market. In a recent interview with CNBC, he stated that he has never held onto an asset for such a long period of time, emphasizing, "It's a great story. It is the only thing that I know of in the world that can have a supply and demand equation that makes it a great investment. So, I will always have some bitcoin in my portfolio."

Who is Paul Tudor Jones?

Legendary investor and Wall Street hedge fund manager Paul Jones rose to fame in 1987 by successfully predicting the global stock market crash on Black Monday. His investment firm, Tudor Investment, also performed exceptionally well during the 2008 financial crisis.

In a letter to investors in May 2020, Tudor Investment discussed Bitcoin as a dark horse in his view. Since then, he has frequently commented on Bitcoin and emphasized its role in his diversified investment portfolio.

First Major Discussion on Bitcoin: How Did Paul Jones Convince Investors at Wall Street Institutions, Mentioning Bitcoin 47 Times?

Paul Jones' Bullish Reason 1: End of Rate Hikes Against Inflation, Bullish on Stock Market Growth

When asked about his view on interest rates, Paul Jones pointed out that the series of rate hikes by the Federal Reserve has come to an end, and the CPI has been declining for 12 consecutive months, a historical first.

He believes that the current market situation is similar to mid-2006 before the 2008 financial crisis when the Federal Reserve halted its monetary tightening policy, leading to over a year of stock market growth.

I believe the stock market will continue to rise this year, especially after a period of subdued trading cycles, with a significant amount of cash available for investment. I'm not overly bullish; this will be a gradual process.

He also mentioned that a U.S. debt crisis could cause market turmoil, but he would use this as an opportunity to buy at lower levels.

Paul Jones' Bullish Reason 2: Productivity Entering the Next Stage

Paul Jones pointed out that the recent adoption of AI and large language models will bring about a flourishing development in global productivity, similar to the productivity miracle that occurred after World War II when the U.S. economy rapidly recovered from depression, significantly increasing overall productivity.

He also highlighted the increased productivity during periods such as the popularization of personal computers in the 1980s and the development of the internet in the 1990s, where productivity saw a significant boost. Paul Jones believes that AI and other large language models could potentially bring 1.5% annual growth in productivity over the next five years.

He emphasized that during these periods, the stock market's annual growth rate exceeded 15%, with inflation decreasing, interest rates lowering, and price-earnings ratios rising, all of which make him bullish on the future stock market.

Paul Jones: Firm Believer in Bitcoin

In his first bullish argument on Bitcoin in 2020, Paul Jones described it as follows:

Ultimately, the best strategy to maximize profits is to own the fastest horse, and if I had to make a prediction, I would say that horse will be Bitcoin.

When the host mentioned Bitcoin, Paul Jones suddenly burst into laughter and said:

I have never ridden a horse for so long.

He emphasized that he had always stated he would allocate a small portion of his funds to Bitcoin:

I will invest a little because it's a great story, it's the only thing in the world that humans can control the supply of, and I will always hold a small portion of Bitcoin in my portfolio.

So, will Paul Jones buy more Bitcoin? He mentioned that he is also keeping an eye on gold, which has performed well in recent crises, but Bitcoin still faces regulatory issues, and the U.S. has a comprehensive regulatory system to deal with Bitcoin.

Contrasting his belief that inflation has ended, he is not as optimistic about the future trend of Bitcoin. In conclusion, he stated:

Before the rise of AI in six months, before the expected significant increase in productivity, I may have a completely different argument, but assuming there is indeed slight inflation now, you have to doubt that the game of entering gold and Bitcoin to hedge against inflation has ended.