Billionaire Paul Tudor Jones Loves an ETF That Could Soar 12,771% According to Billionaire Michael Saylor
Paul Tudor Jones is among the investing greats. The 70-year-old is widely credited with predicting the stock market collapse on Black Monday in 1987 when the Dow Jones fell a whopping 22%. Jones’ hedge fund, Tudor Investment Corp, has posted average annual returns of roughly 19% over its more than four-decade existence, according to Hedge Fund Alpha, and Jones is reportedly worth over $8 billion, according to Forbes. Given his accomplishments, the market pays attention to what Jones says and what stocks Tudor Investment Corp buys and sells. Recently, Jones purchased a BlackRock ETF that MicroStrategy Executive Chairman Michael Saylor, reportedly worth more than $11 billion, thinks can rise roughly 12,771% over time. Let’s take a look.
After the completion of each quarter, funds that invest more than $100 million must file a 13F form with the Securities and Exchange Commission (SEC), disclosing what stocks they held at the end of each calendar quarter. They must do so within 45 days of the close of the most recent quarter and then the public can access these forms through the SEC’s database.
In the third quarter, Tudor Investment Corp increased its position in the iShares Bitcoin Trust ETF (NASDAQ: IBIT) by more than 400%, and now holds over 4.4 million shares of the BlackRock ETF. Bitcoin, the world’s largest cryptocurrency by market value, and Ethereum, the world’s second-largest cryptocurrency, are the only two tokens the SEC approved for spot ETFs — Bitcoin spot ETFs like iShares Bitcoin Trust mirror Bitcoin’s price by owning the token itself. The ETF stores and manages the crypto assets and then sells shares to investors. The ETF currently has a fee of 0.25% of the fund’s net asset value.
Tudor Investment Corp owns thousands of stocks, so it’s difficult to know if Jones pulled the trigger on the buy himself. However, Jones has publicly recommended Bitcoin as an investment, so we know he’s a fan.
Jones recently advocated for Bitcoin in response to the worsening fiscal situation in the U.S. The federal government is currently laden with tens of trillions in debt and operating at a deficit. Jones’ theory is that the government will essentially need to inflate itself out of this situation, which is why he thinks all roads lead to inflation. He believes investors need to hedge themselves in preparation and that investments like gold and Bitcoin are good options.
However, nobody is more bullish on Bitcoin than Saylor. MicroStrategy, the company he founded and whose board he now oversees, has been buying loads of Bitcoin and has not slowed down, even as the token approached and eventually surpassed $100,000. Saylor thinks Bitcoin is just getting started and can hit $13 million per token by the year 2045, implying over 12,771% upside from current levels (as of Dec. 12).
Saylor lays out his scenario in a few different ways. First, he thinks Bitcoin is poised to consume more of the world’s capital as the token becomes more ingrained in the financial system. When Saylor made his $13 million prediction, Bitcoin consumed 0.1% of world capital. Saylor thinks this figure will eventually rise to 7%. Another way Saylor looks at it is through annual returns. The multibillionaire noted that Bitcoin has generated annual returns of 46% during the past four years. Using a 29% average annual return until 2045 would get Bitcoin to Saylor’s $13 million price target over the next roughly 21 years.
Making price predictions for a volatile asset like Bitcoin is very difficult, so I wouldn’t put too much stock in Saylor’s $13 million price target. However, I view Bitcoin as a good long-term asset, given its scarce supply, which seemingly makes it a good hedge for inflation. I also think Bitcoin will experience growing adoption as more financial institutions work with the token, create spot Bitcoin ETFs, and become a more common asset to own in the typical portfolio.
Given Bitcoin’s run during the past month, I would consider dollar-cost averaging right now, in which you buy a set amount of the token over regular intervals such as monthly. Big runs like this can be susceptible to near-term pullbacks, which are healthy long term.
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Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Billionaire Paul Tudor Jones Loves an ETF That Could Soar 12,771% According to Billionaire Michael Saylor was originally published by The Motley Fool
