Hedge fund billionaire Paul Tudor Jones says he’s keeping an eye on Bitcoin (BTC) and gold as geopolitical conflict and the likelihood of a recession increase.
In a new CNBC interview, the legendary investor say that he favors BTC and the precious metal as he expects economic troubles that could send stock markets into an ugly correction.
Says Jones,
“I would like to have gold and Bitcoin together. I think they’re probably going to take on a larger percentage of your portfolio than they historically would because we’re going to be going through a challenging political time here in the United States, and we’re also going to go through – we obviously have a geopolitical situation.”
Jones says investors will likely pour at least $40 billion into gold as the recession approaches, and Bitcoin may also have a place in prudent portfolios.
“It is more likely than not that we will enter a recession. There are some pretty obvious recessionary trades. The simplest are: the yield curve becomes very steep, term premiums move to the back end of the debt markets, to 30-year, 10-year and 7-year paper. The stock market typically falls – just before a recession – by about 12%. That will probably happen at some point, at some level. And if you look at the large short positions in gold, a recession is more likely to occur; the market is typically very long…
There will likely be $40 billion worth of gold purchased between now and if the recession actually occurs. So yeah, I like Bitcoin and I like gold here.”
The founder of Tudor Investment Corporation says a recession is likely in the first quarter of next year due to the aggressive stance of the Federal Reserve and the rising returns on long-term US government bonds.
“So what’s happening is and why we’re probably going to go into a recession sometime in the first quarter of next year, probably because the bond market, simply through supply and demand, is going to drive more rate hikes because we don’t have a settlement price for long-term debt yet. And so those interest rate increases will probably plunge us into a recession.”
Bitcoin is trading at $27,444 at the time of writing, up 0.3% in the past 24 hours.
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