CNBC: The Bitcoin Reveal

Summary

On May 11, 2020 — days after his "Great Monetary Inflation" investor letter began circulating — Paul Tudor Jones went on Squawk Box and confirmed on live television what the letter implied: he had personally allocated between one and nearly two percent of his assets to bitcoin. Asked what had changed the mind of a self-described skeptic, his answer was one word: COVID, and the monetary response to it. Bitcoin was, he said, "a great speculation" — the birthing of a store of value in real time, in a world where cash had become a wasting asset by design.

The interview is widely credited with breaking the institutional taboo on bitcoin allocation: when a founder of Tudor Investment Corporation put a percentage on air, every investment committee in the country had a new question to answer. The conversation also ranges over the pandemic's social cost and that evening's Robin Hood Foundation benefit. The transcript derives from machine captions of the broadcast; words are preserved verbatim — including ASR artifacts such as "code" for "COVID" — with only punctuation regularized.

Full Text

Machine transcript (YouTube auto-captions), punctuation lightly normalized; wording as transcribed. Recognition errors possible — see sources.yaml for provenance.

those things Paul Tudor Jones joins us this morning is the founder and chief investment officer of Tudor Investments chairman of just capital and founder and board member of the Robin Hood Foundation the having a virtual fundraiser this evening that's gonna be carried on CNBC we're gonna talk about that in just a minute Paul but we're thrilled to see you you told us in late January back in Davos to be worried about this pandemic and then we talked to you again about six weeks ago in late March and you had a much more optimistic point of view both about what was going to happen in terms of the health issue and also in terms of what was going to happen to the markets you've been right about the markets on the health issue you had suggested back then that you thought only 40,000 people there'd be 40,000 deaths in America and I wanted to understand your analysis as you look back on it now and what you're thinking about looking forward thanks Andrew well when I said that on your show last time that was probably at the time I think that was on the less optimistic scale of what people were forecasting and it also it was difficult at the time to even if you'll remember it was difficult to even comprehend 10,000 deaths now we're obviously at 70 plus and Counting you know the American people are a unique breed when you think about it we have a second amendment that says it gives us the right excuse me we have an amendment that says is we have the right to bear arms that's an incredible mindset when you think about it as a people so that we will never be under the yoke of a tyrannical government we have States whose motto is live free or die so I think America's greatest strength is its its individualism it's a love of freedom in the case of this pandemic it's also our greatest weakness because it's the if you look at the Asian countries that are succeeding and beating this they're doing it because they place a much greater emphasis on societal values and they individual rights so it's very difficult to get Americans to act as one unit to come together and to do what's necessary to actually again reduce the number of Coby cases and again I think it just goes back to the core of who we are as a people and I don't necessarily see that changing going forward so we're probably we're clearly the hardest hit of any country in the world and as far as the eye can see right now certainly with the kind of mentality that we've got and the leadership that we've got and I think there's the core basic principles of who we are I don't know if that's going to change and so how does that impact your thinking about the world of investing does the stock market look fairly valued to you cheap to you overvalued to you well I think the again the last time I was here I thought the market would be higher at this point in time primarily it's higher because we're in a liquidity driven State I think this part the bounce was easy to forecast I think what happens from here again depends a lot on code bit so there'll be a shift and focus from liquidity issues somewhere down the line to solvency issues and if we start seeing if this if we don't find a vaccine or a cure if we don't find a much better way of testing at scale for the population so that we can get back to work and we start seeing daily doses of bankruptcies and other insolvency xan I think the markets going to have a much more difficult time so so much of this is path dependent on what happens with our response to Coby can we find a way with or without a vaccine to get people engaged again there's again there's that dynamic tension between the health costs and then the economic cost but I wouldn't say just the economic cost they're probably the one thing I get nervous about with regard to the self martini and I've been doing it now like all of his hand for the past two months if you just think about the track of human history right every year or every decade that's gone by we as we've added more humans to the planet by definition we probably become more urbanized we've crowded together it's cause we're social animals and but with that has also been an attendant drop of the number of wars we have our violence towards each other even our poverty rates are probably the lowest in the history of the world or war war or were before Kobe so we are by definition social animals and our sympathy and empathy and compassion and kindness the more that we're together I think the more of those values become embedded in who we are has been a good thing the the social cost of quarantine the self quarantine II which I don't know but I'd say it's a legitimate question is is if we look back and we're doing this for another year of the world is do we begin to chip away at the very traits again of of kindness and brotherhood and sisterhood do we begin to chip away of those because we're all isolated I don't know the answer to it but it's something that stays in the back of my mind particularly as we go through our weekly robin hood meetings and we're thinking about programmatically the people are in need right now we've had this great rush to help and I just hope it continues I hope that we continue with the same sympathetic responses that we're seeing right now Paul but doesn't that suggest to you I mean if you're talking about the American will the will of the people to be social and we're starting to see it across the country irrespective of in certain cases what the municipalities are saying or even what health experts are saying perversely perhaps even isn't that suggestive and promising for the economy I think I think it is promising for the economy and again I don't pretend to know what the right balance is I don't pretend to know the right answer there's the the costs are so huge on either side of the scale the COBE costs in terms of deaths is tragic and horrible but then again we've got the economic cost and the unknown and unquantifiable social cost of self-isolation so I don't know what the right answer is I think the markets going to figure this out we're obviously doing that right now certainly our cost has been much higher than a variety of other countries who have a more stringent lock locked down and I don't know necessarily what's the right way that we should be doing it certainly in China South Korea etc they are we can compare their situation to our situation because they have such fewer deaths etc but the way they got there is they have a phone with an ID number and your tracked your tracked every single day as a society are we willing to do that again I don't know the answer I I think I know what the I don't know what the right answer is I think I know what the answer is I think Americans are too different I don't know if we'll be able to come together and do that all for a long time you were a skeptic of Bitcoin and some cryptocurrencies but you recently appeared to have changed your mind about that what happened well code had happened and the great monetary inflation happened and that made me begin to think about how do you want to be positioned in your portfolio going forward so that's really what trip my interest in Bitcoin and you have to realize if you just think about say Bitcoin versus cash right Bitcoin when I think of stores of value I think of it four ways purchasing power trustworthiness liquidity and portability now that's kind of the the categories that put it in so when it comes to when it comes to trustworthiness bitcoins 11 years old there's very little trust in it we're watching the birthing of a store of value and whether that succeed or not only time will tell what I do know is that every day that goes by and Bitcoin survives the trust in it will go up if you take cash on the other hand and you think about it from a purchasing power standpoint if you own cash in the world today you know your central bank has an avowed goal of depreciating its value two percent per year so you have in essence a wasting asset in your hands so Bitcoin I think it's a great speculation I've got something between one and I think just over just over one percent of my assets in Bitcoin maybe it's almost two that seems like the right number right now it's not for me it's not the greatest it's not the you know the great cure for the for all the materials etc it's a great speculation that's what I would say Bitcoin is right Paul do you do you see this though in relation I'm thinking about tech stocks now because one of the things we have seen even though over the past two months is just the move towards virtual anything that can be done virtually has had great success whether it be zoom or any of the big tech companies in the valley because we're all able to do that virtually is that the way you see Bitcoin and separately do you own gold I was going to ask at the same time I have assets in gold also I think gold can go substantially higher and yes the digitization of the world clearly benefits Bitcoin I mean what we wouldn't even be talking about Bitcoin if we weren't if we weren't seeing first cousins like venmo and a variety of other ways might still don't even carry cash they only barely even know what cash is so we're clearly digitizing the global economies you seen some countries do it explicitly like India you're seeing other countries on the way to do it like China so we're getting an increasingly digitized world and Bitcoin will be that much more accessible by that universe of people that could own it as a store of value when you think about heavy bull market every single bull market has one common thread an ever-expanding universe of people who own it so there's probably the estimates are between 55 and 70 million people on Bitcoin we really if you're buying Bitcoin your bet is that number is going to go to 120 million or to 200 million and it's kind of hard when you look around and you see that the world's becoming increasingly digitized not to think that the proponents evidence at this point in time doesn't point in that direction but again I am when I think of Bitcoin I look at it is one tiny part of a portfolio it may end up being the best perform of all of them I kind of think it might be but I'm very conservative I'm going to keep it tiny a percent of my assets in it and that's it it has not stood the test of time for instance the way the gold has which has been a store of value for 2,500 years there when I think about when I think about what's happening right now we're really probably depending upon how long this lasts if it's if we're a year from now we're still in the same situation we will be and will be called the second depression just depends on whether unfortunately this goes to a year with this kind of a lockdown another year with this kind of a lockdown so 1.2 million New Yorkers have lost their jobs the last two and a half months not I I say to my I think to myself I wonder how many of that 1.2 million somewhere in my nearly 5 decades in this city either open a door for me or serve me a meal or maybe they were a tour guide or maybe they were a taxicab driver who knows what they do but I wonder how many of those 1.2 million that I intersected with and then I think ok they served me some of the greatest memories of my entire life as well as are responsible for the success I've had so here tonight in our telephone and supporting any charity really anywhere I'm thinking New York because this is the epicenter I'm thinking okay this is my chance to serve them this this is my chance to be of service to them to try to equalize the ledger and I want to be able to say in 20 years to my grandchildren that when they asked me what did I do and the second depression I will look him in the eye and I want to tell them I did more than I ever thought I could do I think that's the measure well Souter Jones we appreciate you being with us we are rooting for you we are rooting for Robin Hood and we're rooting for New York and the rest of the country and we appreciate seeing you and good luck this evening as we mentioned we'll be broadcasting this evening at 7:00 p.m. Eastern Time Paul Tudor Jones thanks so much over to you thank you thank you Paul thank you thank you and Paul thank

Key Themes

The interview operationalizes the fastest horse framework from the Great Monetary Inflation letter published days earlier: the same four-part store-of-value scorecard, the same conclusion that bitcoin scores far above what its market cap implies, now with a personal position attached. The sizing discipline — one to two percent, kept tiny even while expecting it might be the best performer — is defense first position construction in its purest form: asymmetry large enough to matter, small enough to survive being wrong. His remark that every bull market is built on an ever-expanding universe of buyers is the demand-side logic of the analog model, reading bitcoin's adoption curve against gold's in the 1970s.

Context & Significance

This was the television half of a one-two punch. The letter had made the intellectual case; the interview made it personal and concrete — a named percentage, on the record, from one of the most respected macro traders alive. Bitcoin, which traded near $8,600 that morning, never again lacked institutional sponsorship; within eighteen months it had risen nearly eight-fold, and the "1–2% bitcoin allocation" had become standard portfolio language.

Inside the archive, the interview marks the public start of PTJ's legacy-era framework. The thread runs forward through the June 2021 green-light interview and the October 2021 declaration that bitcoin was beating gold, but the taboo-breaking moment is here. It also captures something rarer than a market call: a 65-year-old trader updating a forty-year framework in public, in real time, because the facts — $3.9 trillion of new money — demanded it.