$500B Is the "Wrong Market Cap" for Bitcoin: Paul Tudor Jones
Billionaire hedge fund manager Paul Tudor Jones first made waves in the wider Bitcoin space in May this year when he revealed that one percent of his assets is allocated to Bitcoin, the emergence of which he described as the historic “birthing of a store of value.”
In an interview with Yahoo Finance on Thursday, Jones reinforced his position. While emphasizing that he didn't see himself as "an expert on Bitcoin by any stretch," he showed himself convinced that the asset, at this point in time, is severely undervalued:
With a market cap of $500 billion, it’s the wrong market cap in a world where you’ve got $90 trillion dollars of equity market cap, and God knows how many trillions of fiat currency.
Notably, Bitcoin has yet to crack the $500 billion market cap mark. At press time, its market cap sits at a record $361 billion, as the price per bitcoin has been consolidating above $19,000.
"Bitcoin reminds me so much of the internet stocks of 1999," Jones continued, "because the internet was in its infancy, no one knew how to value it because of the world of possibility that lay ahead."
He further outlined his conviction that in 20 years' time, "all of us will be using some type of digital currency," adding that "cash may be gone."
Reinforcing the narrative of Bitcoin as "digital gold," which as won many supporters this year, Jones imagines a future scenario for Bitcoin similar to that of gold:
It’s going to be a lot like the metals complex where you have precious crypto—that might be Bitcoin, the first crypto, first mover in the world. It’s so compressed; it has that historical integrity within digital currencies that it will always have. Because of its finite supply, that might be the precious crypto.
The Wall Street veteran sees Bitcoin exist as the gold alongside "sovereign" digital currencies, referring to central bank digital currencies (CBDCs), and private digital currencies serving a "transactional" purpose.
Ultimately, nobody, not even Paul Tudor Jones, can look ten, twenty years into the future—but whatever that future looks like, it will be very different from what we see today. "And I know that if I had to take a position, I’m going to take the brand name, which is Bitcoin. I’m going to assume that it’s the wrong price for the possibilities that it has. And I’m going to assume that the path forward from here is north."
It won't be all rosy, however, and Jones anticipates "sovereigns" to "fight back against cryptocurrencies along the way," in a similar manner to the ban on gold in the 1900s. "They banned it, but it had appeal; it had allure, because it was the one thing that was constant" whereas fiat currencies are overshadowed by uncertainty.
As for the foreseeable future, Jones expects a "crazy rocket ship ride up and down along the way."
But my guess is that something like Bitcoin in particular will be substantially higher 20 years form now. […] And who knows what role it has in the monetary system.