The Smartest Investors Are Buying Bitcoin — Here’s Why – Motley Fool

The Smartest Investors Are Buying Bitcoin — Here’s Why – Motley Fool

Buying bitcoin was once taboo. Critics called it a fraud and a scam. Warren Buffett even went so far as to call it “rat poison squared” back in 2018. 

Yet people’s views toward cryptocurrency are changing. Some of the best and most respected investors in the world are now buying large amounts of bitcoin. And some have signaled that they intend to buy even more in the coming year.

Here’s why.

A miniature gold bull is on top of a keyboard button labeled bitcoin.

Investors are growing more bullish on bitcoin. Image source: Getty Images.

The inflation hedge

Famed macroeconomic investor Paul Tudor Jones purchased bitcoin in May as a means to protect his portfolio from the negative effects of inflation. Jones expects the massive stimulus measures enacted to mitigate the carnage wrought by COVID-19 to eventually cause a steep rise in the prices of goods and services. “We are witnessing the Great Monetary Inflation — an unprecedented expansion of every form of money unlike anything the developed world has ever seen,” Jones said. 

To hedge his portfolio against the negative impact of this central-bank-induced inflation, Jones evaluated multiple types of potential investments, including gold, commodities, and stocks. Yet Jones believes bitcoin is the best option. He sees the cryptocurrency increasingly becoming a store of value, due in part to its advantages over gold. Bitcoin is easier to store and transfer than the precious metal. It’s also more divisible.

Moreover, Jones argues that the trend
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