Headline: Paul Tudor Jones calls bitcoin “the best inflation hedge,” warns stretched stock market could spark wider fallout Billionaire hedge-fund manager Paul Tudor Jones told the Invest Like the Best podcast that bitcoin (BTC — roughly $77,040.70 at the time of the interview) is “unequivocally the best inflation hedge that there is — more than gold,” pointing to its fixed supply as the defining advantage. Jones argued bitcoin’s capped issuance makes it uniquely scarce compared with traditional hedges like gold, whose supply grows each year. That scarcity, he said, made bitcoin the most compelling inflation trade during periods of heavy monetary and fiscal stimulus — notably after the March 2020 pandemic crash when central-bank interventions injected massive liquidity into markets. While bullish on bitcoin’s role as an inflation hedge, Jones was far more cautious about equities. He warned that current stock valuations are historically high and likely point to weak future returns: “If you buy the S&P at this current valuation, the 10-year forward returns [are] negative,” he said. He also flagged a wave of high-profile IPOs — including potential listings from SpaceX and AI firms such as OpenAI and Anthropic — combined with a slowdown in share buybacks as pressure that could increase equity supply and weigh on prices. Jones highlighted the extreme level of U.S. stock-market capitalization relative to GDP, noting past peaks before major downturns: about 65% in 1929, 85–90% in 1987, roughly 270% in 2000, and now around 252%. That degree of “leverage in equities,” he warned, raises the stakes of a significant correction. Beyond portfolio returns, Jones said a sharp market sell-off could ripple through the broader economy — shrinking capital-gains tax receipts (he noted capital gains account for roughly 10% of U.S. tax revenue), widening the budget deficit, and inflicting pain on the bond market. “You can see the budget deficit blowing up. You see the bond market getting smoked,” he said, warning of a potentially self-reinforcing negative cycle. The interview reinforces a growing narrative among some macro investors: bitcoin’s fixed supply makes it an attractive inflation hedge in a high-liquidity world, while stretched equity valuations and upcoming supply dynamics could leave stocks vulnerable — with consequences that extend beyond investors’ portfolios. Read more AI-generated news on: undefined/news