- Paul Tudor Jones predicts rampant inflation.
- Billionaire investor is long on Bitcoin, gold
- National debt sparks inflation fears.
The US debt is reaching concerning levels, with many investors sounding the alarm. After the national debt surpassed the $35.77 trillion mark, investors fear what the effects on the entire economy will be.
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One of them, Paul Tudor Jones billionaire hedge fund manager, predicts a likely outcome of the debt crisis. He expects rampant inflation, making assets like Bitcoin and gold even more attractive than now.
U.S. Debt Sparks Fears of Inflation
The US national debt, which recently crossed the $35.77 trillion mark, is sparking concerns among investors. On Tuesday, October 22, billionaire investor Paul Tudor Jones stated that the current debt crisis can only end in one way: with massive inflation.
As the debt becomes a growing burden, the government can put pressure on the Federal Reserve to buy its bonds. This gives the government a way to service old debts, but it also introduces more liquidity in the money supply.
Paul Tudor Jones explains that this is something that governments have done for centuries. “All roads lead to inflation—that’s historically the way every civilization has got out: they’ve inflated away their debts,” the billionaire explained.
Why Gold and Bitcoin Are a Hedge Against Inflation
Because of these inflation risks, Paul Tudor Jones argues that investors should hold commodities, including gold and Bitcoin. Gold has been a reliable hedge against inflation for centuries, while Bitcoin supporters believe the same thing for “digital gold.”
The supply of both gold and Bitcoin is increasing slowly, through mining, conventional, and crypto. However, the growth of this supply is slower than that of traditional currencies. This means that assets like gold and Bitcoin tend to increase in value with time, and investors turn to them when inflation is high.
In specific countries where inflation is getting out of hand, people turned to Bitcoin. For instance, this happened in Turkey in 2023, when rampant inflation saw more people get into crypto. By May 2023, 52% of the people aged 18 to 60 invested in crypto. Most invested in Bitcoin.
On the Flipside
- Paul Tudor Jones has come out in favor of Bitcoin before. In 2021, he compared Bitcoin to math and suggested the asset struck a chord with him.
- Inflation concerns are creating bullish momentum for Bitcoin, edging closer to $70,000.
Why This Matters
Endorsement by a major investor is a good sign for Bitcoin as an asset and may lead more people to reevaluate their portfolios.
Read more about what Paul Tudor says about Bitcoin:
Billionaire Paul Tudor Compares Bitcoin to Math and Says It’s Great
Read more about Chainlink’s technological developments:
How Chainlink’s Private Transactions Change the Game for Institutions
