https://ift.tt/3Gn0EAx Thinking Bitcoin Is a Madoff-Style Ponzi Scheme? Listen to the World’s Best Hedge Fund Managers Investing in Bitcoin | by Sylvain Saurel | Jan, 2022

Of all the most famous hedge fund managers, Paul Tudor Jones was the first to have the courage to come out of the woodwork. In May of 2020, Paul Tudor Jones took a public stand in favor of Bitcoin over gold as a hedge against the great monetary inflation to come. In the race for profits, Paul Tudor Jones then explains that Bitcoin will be the big winner.

In the face of this war on inflation, Bitcoin still won by a wide margin in 2021, giving even more weight to Paul Tudor Jones’ stance at a time when its price was under $10K.

In October 2021, Paul Tudor Jones would reiterate his confidence in Bitcoin:

“Bitcoin is my preferred hedge against inflation over gold at the moment. Clearly, it’s winning the race against gold at the moment.”

While Paul Tudor Jones prefers to invest directly in Bitcoin to take the power, he explains that ETFs will allow more people to come and profit from Bitcoin in the future. Not everyone is made to secure their wealth in his eyes. For him, it’s only a matter of time before the SEC eventually adopts an ETF based on the Bitcoin spot market.

To take full control of Bitcoin, you must take possession of the associated private keys. That means buying your BTC outright. However, Paul Tudor Jones’ opinion is valid. Many investors will prefer to stand behind a third party who will ensure the security of their Bitcoin for them. A way to take advantage of Bitcoin’s hedge against inflation, but not to protect against censorship.

This is the current reality in the Bitcoin world. Many people still don’t see that Bitcoin is an essential weapon for taking full power over the fruits of one’s labor. This will come in the future probably, but it will take more time.

Stanley Druckenmiller’s change in attitude toward Bitcoin is even more interesting to study. Paul Tudor Jones never showed hostility to Bitcoin. Stanley Druckenmiller was a little more critical against Bitcoin. However, Stanley Druckenmiller has always struck me as someone who makes sense. Especially when he said that:

“Bitcoin is like anything else: it’s worth what people are willing to pay for it.”

Like me and the Bitcoiners, Stanley Druckenmiller is a proponent of the subjective conception of value theory. Bitcoin is valuable to the 130 million people who are willing to pay that price to own it.

Stanley Druckenmiller initially saw Bitcoin as a solution to a problem that did not exist. The need for people to have hard money available to them was not apparent to him.

And then the COVID-19 pandemic came along. The response of the American government with the stimulus of several trillion dollars and the attitude of the Fed, which printed American dollars out of thin air in unlimited quantities, made him aware of the existence of this problem:

“I thought Bitcoin was solution in search of a problem. I found the problem: When we did the CARES act and Chairman Powell started crossing all sorts of red lines in terms of what the Fed would do and wouldn’t do. The problem was Jay Powell and the world’s central bankers going nuts and making fiat money even more questionable than it already has been when I used to own gold.”

Stanley Druckenmiller then became so interested in Bitcoin that he became a supporter of it:

“Bitcoin has enhanced hard sound money properties that gold has but without any of the flaws.”

What finally convinced Stanley Druckenmiller of Bitcoin’s incredible potential for the future was the strength of conviction of Bitcoiners in March 2020 during the liquidity crisis:

“Then the second thing that happened is I got a call from Paul Tudor Jones and he says: ‘Do you know that when Bitcoin went from $17,000 to $3000, that 86% of the people that owned it at $17,000 never sold it?’. Well, this was huge in my mind. So here’s something with a finite supply and 86% of the owners are religious zealots. I mean, who the hell holds something through $17,000 to $3000? And it turns out none of them — the 86% — sold it.”

The unity of the Bitcoiners of last resort allowed for a strong rebound in March 2020 and Bitcoin continued to advance block by block in its revolution as it has since its inception. Stanley Druckenmiller explains that he has been buying Bitcoin ever since, without saying how much he holds. Which is one of the golden rules of Bitcoin, I remind you: talk about Bitcoin, but never about your Bitcoin.

I’ve written a lot about Ray Dalio’s positions on Bitcoin in recent years. As I’ve followed everything he’s said about Bitcoin, I’ve been a privileged witness to his changing attitudes. While he didn’t believe in Bitcoin at all at first, Ray Dalio eventually evolved month by month to admit during 2021 to buying Bitcoin. Just in case.

Ray Dalio is following an opinion of Satoshi Nakamoto expressed in the early months of Bitcoin:

“It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self-fulfilling prophecy.”

Despite this, Ray Dalio continues to express some thought-provoking opinions about Bitcoin from time to time. The latest one? The one expressed during the fall of 2021 when he said that if Bitcoin gets too big, governments will kill it.

I’ll let you read my response to that:

For me, if Ray Dalio is right about governments wanting to destroy Bitcoin at some point in the future, I remain ultra optimistic that Bitcoin will continue its revolution and come out even stronger.

Alan Howard is a British billionaire hedge fund manager who invests in Bitcoin, but mostly in Bitcoin-related companies. A way to take advantage of the booming ecosystem around Bitcoin and cryptocurrencies. In 2021, for example, he made a $4 million investment in the Asian crypto trading app Kikitrade.

Earlier in the year, he announced investments in CoinShares or the Canadian crypto lending company Ledn. Finally, in April 2021, it was announced that Brevan Howard’s hedge fund’s direct investments in cryptocurrencies represented 1.5% of his main fund’s positions.

I end this quick overview with Steve Cohen, a billionaire hedge fund, who was for a long time what we call a crypto skeptic. As is the case with other Wall Street financiers, it was his son who made him realize the incredible potential of this innovative new world:

“My son convinced me this was something I needed to do.”

Once he decided to delve into Bitcoin, Steve Cohen quickly drew parallels to the early days of the Internet in the 1990s:

“Once I decided there were opportunities, and I thought this could be a space like the Internet — it could be incredibly transformational — I wasn’t going to miss this.”

His entry into Bitcoin and cryptocurrencies dates back to a few months ago, but we can also see that he followed the same path that all will follow: sterile opposition before finally opening his eyes to the need to embrace this revolution to be among those who will benefit the most.