June 14, 2021

This Is Why Druckenmiller And Tudor Jones Changed Their Mind On Bitcoin

3 min read

In 2017, Bitcoin reached an all-time high of $20,000. By 2018, the cost of the first cryptocurrency by market cap stopped by more than 50%. What takes place later on caught the attention of 2 famous investors, Stan Druckenmiller, founder of Duquesne Capital, and Paul Tudor Jones, creator of Tudor Investment Corporation.

Druckenmiller has been providing interviews to several news outlets and analyst John Street Capital assembled them by means of his Twitter handle. The famous investor expressed concerns about the current policy exercise by central banks around the world. He believes these organizations are making fiat currency “more doubtful”.

For the very first time, Druckenmiller revealed that throughout a call with Tudor Jones, he discovered a reality that made him change his mind on Bitcoin and the capacity of cryptocurrencies to end up being a hedge versus reserve bank inflationary policies. Tudor Jones asked Druckenmiller the following:

“Do you understand that when Bitcoin went from $17,000 to $3000 that 86% of individuals that owned it at $17,000, never ever sold it?” Druckenmiller replied: Well, this was huge in my mind. So here’s something w/ a finite supply & & 86% of the owners are religious zealots.

This conviction, Bitcoin holders’ diamond hands, and the economic outlook forced Druckenmiller and Tudor Jones to think about whether they should purchase Bitcoin. As they revealed later on after that, they ended up being BTC financiers throughout 2020.

Bitcoin, The New Gold For Younger Generations

Bitcoin has additional characteristics which the legendary investor utilized to determine its capacity. Tudor Jones told Druckenmiller that the cryptocurrency became a brand after 13 years because its inception. The cryptocurrency attained this with no marketing team or a CEO to command such technique, it is driven by holders, its network effect, and the assurance of its minimal supply.

Duquesne Capital creator has only one regret when it concerns BTC, like numerous financiers, he feels that he ought to have bought more.

I shopped $100M of $BTC at $6,200. It took me 2 weeks to purchase $20M. I purchased it all around $6,500, I think. So like an idiot, I stopped buying it.

Druckenmiller included that there is a generational shift led by “kid on the West Coast” and the younger investors. They think about Bitcoin as Druckenmiller saw Gold, a store of worth, insurance coverage against fiat currencies.

When comparing Ethereum and Bitcoin, Druckenmiller believes the latter has won the “shop of worth video game”. He based his viewpoint on 3 points, BTC has a brand that has existed for around 13 years and a limited supply. The legendary investors declare ETH might be the “MySpace” of the crypto market.

I’m a bit more skeptical of whether it can hold its position. It advises me a little of MySpace prior to $FB. Or possibly a much better analogy is Yahoo prior to Google came along. Google wasn’t that much faster than Yahoo, however it didn’t require to be. All it required to be was a little bit much faster and the rest is history.

He anticipates more appreciation for BTC’s rate if the U.S. Federal Reserve and its Chairman, Jay Powell, “keep imitating he’s been acting”. As long as this continues, BTC and Gold will have wind to keep rising.

At the time of writing, BTC trades at $36,962 with small gains in the 1-hour and everyday chart. In the weekly and month-to-month charts, BTC has a 5.9% revenue and 35.9% loss, respectively.

Bitcoin BTC BTCUSD
BTC with bullish momentum in the everyday chart. Source: BTCUSD Tradingview