PTJ Buying Bitcoin

Paul Tutor Jones wants to buy Bitcoin, which Is up 25% in the last 2 weeks and closing in on 10,000! The macro hedge fund manager, who has been trading in the 1970s, said in a letter to clients that he is buying Bitcoin as a hedge against inflation. Central Banks have been printing money non-stop since the breakout of the coronavirus, and at some point, they are going to have to pull in the reins. When money starts to tighten and interest rates rise (at some point), the expected result is inflation. Jones is betting that Bitcoin, along with gold, will act as a hedge against his expected inflation. The bet on Bitcoin is an interesting one, as the cryptocurrency has been trading in the same direction as stocks since the lows in March.

Bitcoin was already going bid into the “halving” that is expected next week since it bottomed along with stocks in mid-March. The news of PTJ’s purchase of Bitcoin added to the surge as it heads into resistance near 10,000. The psychological level confluences with the downward sloping trendline of the long-term triangle dating back to the highs of 2017, recent previous highs, horizontal resistance, and the 61.8% Fibonacci retracement level form the June 2019 highs to the March lows. In addition, one has to consider that with the “halving” approaching, could this be a “buy the rumor, sell the fact” trade? First level of support is near 9500 (on the daily chart, not shown)

Source: Tradingview, City Index

Bitcoin wasn’t the only “inflation hedge” to go bid on the back of the PTJ news. Gold is also considered a hedge against inflation. Because Paul Tutor Jones thinks inflation is headed our way, gold was also bought, rising over 30 dollars today. The precious metal has been consolidating in a triangle formation since early April, and with today’s move, appears to possibly be ready for a breakout to the upside. Gold hit resistance near the day’s highs at the downward sloping trendline of the triangle near 1723. Above that, gold could retest the April 14^th highs at 1748. 1795 provides resistance in the form of prior highs from 2011/2012, and final resistance is the all-time highs at 1920. Support is near the day’s lows of 1681.5, which is also the upward sloping trendline of the triangle.

Source: Tradingview, City Index

Paul Tutor Jones is a big name in the hedge fund world. So, when he speaks, people listen. Traders and investors will be looking for inflation hedges at some point in the future. PTJ seems to think the future is Bitcoin and the future is already here!

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.