KEY POINTS
  • Legendary trader Paul Tudor Jones is reportedly buying bitcoin as an inflation hedge as central banks around the globe print money.
  • Jones, one of Wall Street's most-successful hedge fund managers, revealed in a message that one of his funds holds a low single-digit percentage in bitcoin futures.
  • His comments in the reported memo come as central banks embark on unprecedented policy initiatives designed to help businesses during the Covid-19 pandemic.
Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.

Legendary trader Paul Tudor Jones is reportedly buying bitcoin as an inflation hedge as central banks around the globe print money to relieve coronavirus-battered economies.

Jones, one of Wall Street's most-successful and seasoned hedge fund managers, revealed in a message that one of his funds holds a low single-digit percentage in futures on the cryptocurrency, Bloomberg News reported. He compared it to the gold trade in the 1970s, according to the report.

Bitcoin futures trading on the CME jumped 5% on Thursday.

Jones, founder and chief executive at Tudor Investment Corp., told CNBC in March that he thought the stock market could be higher by June if coronavirus cases began to peak. The investor said at the time that he expected stocks to endure a choppy April but that, ultimately, equities would again climb.

"I do think the stock market's going to find a bottom once we get a peak in the epidemic curve, [there's] not a doubt in my mind the stock market will rally," he said on March 26. "My guess is we'll be higher three or four months from now, five months from now, than lower than where we are right now."

Jones' forecast appeared intact on Thursday with the S&P 500 up about 18% since his comments in late March and with the Nasdaq Composite now positive for 2020. His comments were of particular importance at the time given the historic market sell-off just days earlier that saw the Dow Jones Industrial Average and S&P 500 each sink more than 25% each from their respective all-time highs.

He stressed in March that — as both part of his market thesis and as a matter of public wellbeing — the novel coronavirus, as deadly as it is, shouldn't be sensationalized into an unbeatable plague.

"We've got to be careful not to mythologize this particular disease," he said at the time. "We've got to be careful not to mythologize this into the pandemic Godzilla. We can beat this thing."

His comments in the reported memo come as central banks, including the U.S. Federal Reserve, embark on unprecedented monetary policy initiatives designed to help businesses keep the lights on during the Covid-19 pandemic. The Fed has already enacted two emergency interest rate cuts that lowered borrowing costs to near zero like they were during the financial crisis.

But it's also promised to introduce 10 separate programs designed to ensure market liquidity and issue loans to businesses and consumers in need. That's in addition to the open-ended program of buying U.S. debt and mortgage-backed securities. 

It's those types of policies, which involve the Fed essentially printing money and injecting it into the U.S. economy, that have some investors worried that prices could zoom higher in the future.

— Click here to read the full Bloomberg News story.