In the last five years the world has been through a pandemic, wild fires and two wars. The current Israel-Hamas war has further escalated the economic anxiety globally. Several strategists at all levels need to change their plan to cope up with the rapidly changing geopolitical environment.
Billionaire hedge fund manager, Paul Tudor Jones thinks “this might be the most threatening geopolitical environment.” In an interview on CNBC’s Squak Box, Jones also commented on America’s fiscal position. He claimed that it was the weakest since World War II.
Jones cited rising interest rates for getting the economy into a ‘vicious circle.’
As interest costs go up in the United States…you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which put us in an untenable fiscal position
He further said something interesting that will turn heads in the financial circle. Citing all the risks in the current economic scenario, Jones said that Bitcoin and gold are attractive options since it is riskier to own stocks.
I can’t love stocks…but I love Bitcoin and gold
Bitcoin has been often called as the 21st century gold or digital gold by many in the financial circle because of its ability to be prone from external economic risks. Just like gold, Bitcoin is being used increasingly in several countries suffering from hyperinflation and unstable fiat currencies.
Its subtle quality to act as an inflation hedge, just like gold, has been praised and noticed by many. Its potential to be the safe haven during times of distress can truly make it a global currency.
During such times of geopolitical distress Jones considers both Bitcoin and gold as potential safe havens. He has further solidified their status as inflation hedge assets with a considerable impact.
Gold might not be as volatile as Bitcoin but having an alternative is always good for market participants. If Bitcoin scales up to its true potential it can do wonders.