• TennHedge

Estimating Paul Tudor Jones' Bitcoin Exposure

Famed Hedge Fund Manager Paul Tudor Jones told the world last month that he was throwing his hat in the "Bitcoin ring," stating that his Tudor BVI fund may hold as much as low single-digit percentage of its assets in Bitcoin futures, according to Bloomberg. While it is unclear if these futures are settled in cash or physical Bitcoin, it still seems like a fun little exercise to try to estimate how many Bitcoin Tudor may be exposed to.


As a quick aside, I consider Paul Tudor Jones to be the greatest trader currently living as well as one of my idols, so you can imagine the the warm, fuzzy feeling I got when this legend gave Bitcoin his blessing.


Paul, if you ever come across this article, know that there are young traders like me who are inspired by the career you have had, and are overjoyed that you are allocating to Bitcoin.


I'm not trying to get too scientific here, but let's assume Paul Tudor Jones was fully invested in his Bitcoin position 2 weeks before the May 7th, 2020 Bloomberg article (which announced his Bitcoin position) was published. Per whalewisdom.com, Tudor BVI Global Portfolio L.P. has a gross asset value of $21,561,358,000. For simplicity's sake, let's assume Jones's position is 2% of the gross asset value of the fund at an average Bitcoin price of $7,000, which seems reasonable given that Bitcoin mostly traded in the mid $6,000's and $7,000s for most of April. 2% of $21,561,358,000 is $431,227,160. If Jones bought Bitcoin at an average price of $7,000 with that 2% cash value, he would be exposed to approximately 61,600 Bitcoin!


That's a fuck ton of Bitcoin.


This move no doubt made Jones a Bitcoin whale overnight (possibly one of the top holders in the entire Bitcoin market!), and is a prime example of the power of institutional capital in the Bitcoin space with just a 1-2% allocation.


Can you imagine what will happen when central banks and their liquidity get involved?


Bitcoin is still a nascent market, with some of the larger players only beginning to consider entering the market.


If you are allocating to Bitcoin right now, you're still early.


-TH


You should always consider seeking financial advice from a licensed advisor before making decisions with your money, and you should not consider anything I write as financial advice but merely my opinion. Getting your financial house in order is a prerequisite for Bitcoin saving, in my opinion.


Disclosure: nothing in this article should be considered financial advice and I am not a financial advisor. Do your own research as everything in finance carries risk.