Hedge fund manager with a net worth of $4.4 billion says: If gold can hedge against inflation, Bitcoin might do it better

The renowned American hedge fund manager and billionaire Stanley Druckenmiller, with a net worth of $4.4 billion, revealed in an interview with CNBC yesterday that he has allocated a small portion of his investment portfolio to Bitcoin. He mentioned that if holding gold can hedge against inflation, then holding Bitcoin might have an even better effect.

Don't Short the Stock Market Easily

Yesterday, Pfizer and BioNTech announced that their COVID-19 vaccine trial has been more than 90% effective, sparking hope worldwide. With a net worth of $4.4 billion, billionaire hedge fund manager Stanley Druckenmiller advised investors in an interview with CNBC not to easily short the stock market, as positive news on the pandemic will significantly impact economic growth and value. Stanley Druckenmiller stated:

"Many companies will directly benefit from the COVID-19 vaccine, and they may go even further. I certainly don't want to short the market at this time."

Boosted by the vaccine news yesterday, the Dow Jones Industrial Average surged 1570 points (5.6%) at the opening, the S&P 500 index rose 1.2%, both hitting historical highs, and the Nasdaq index also surged 3.8%. Most of the individual stock increases came from sectors like banking, travel, and energy, while "Stay at home" concept stocks like Netflix and Zoom, which previously surged due to the pandemic, saw a general decline.

Stanley Druckenmiller pointed out that during the pandemic, a large amount of funds flowed into "Stay at home" concept stocks, causing their prices to be significantly overvalued. Considering the prospects for the next 3-5 years, stocks from other sectors are undervalued due to overselling, making such rotation quite reasonable.

If Gold Can Work, Bitcoin Can Too

On the other hand, with the Federal Reserve implementing large-scale stimulus measures, inflation is expected to rise in the next 5 to 6 years. Stanley Druckenmiller emphasized that he does not believe the US dollar will sharply decline, but over the next three to four years, the US dollar is bound to experience a slow and long-term downward trend.

In the interview, Stanley Druckenmiller mentioned that assets like gold and Bitcoin are effective hedges against potential inflationary pressures, admitting that he has allocated a small portion of his portfolio to Bitcoin.

"To be frank, if holding gold can be effective, then holding Bitcoin may be even better because it is scarcer, less liquid, and has a higher Beta coefficient. As a value storage tool for millennials and the new digital currency, it is very attractive, and as you know, they hold a large amount."

Although Stanley Druckenmiller emphasized that his gold position is several times larger than his Bitcoin position, he still predicts that his Bitcoin position will perform better.

Institutional Investors Bullish on Bitcoin's Hedging Potential

In recent years, more and more traditional institutional investors have viewed Bitcoin as a tool for hedging against inflation. According to reports yesterday, legendary fund manager Bill Miller, who has beaten the S&P 500 for 15 consecutive years, stated that despite Bitcoin's extreme price volatility, after years of market consensus, Bitcoin's resilience is increasing daily, with the risk of going to zero lower than ever before. Bill Miller said:

"I believe that in the future, every major bank, investment bank, and high net worth company will eventually hold reserves of Bitcoin, gold, or similar commodities."

Furthermore, US banking giant J.P. Morgan released its latest observations on investment funds on November 6, specifically mentioning Grayscale's Bitcoin Investment Trust Fund, GBTC, noting its rapid growth in funds in recent weeks, possibly due to family offices viewing Bitcoin as an alternative to gold.