On Monday, Wall Street investor Stan Druckenmiller announced that he is long on Bitcoin.
Druckenmiller is the president of Duquesne Capital, which closed in 2010 with $12 billion under management. He also was one of the few investors to have made a large amount on his investments in 2008. His net worth is estimated to be $4.4 billion.
In a CNBC interview, he explained that he thinks Bitcoin has "a lot of attraction in it" from millennial investors and "West Coast money." "They got a lot of it," he added, referencing the aforementioned demographic and the propensity to buy Bitcoin.
On how Bitcoin stacks up against gold, he said that he thinks BTC will "work even better" than gold if the "gold bet works." Gold has traditionally been seen as a hedge against inflation, having held its purchasing power over decades.
He did not disclose what percentage of his portfolio is in Bitcoin, though he did say that he owns "multiples more" in BTC than gold.
Druckenmiller has long been a proponent of gold, having marge large bets on the precious metal over his career.
Assuming gold still represents a material portion of his portfolio at five to ten percent, Bitcoin may have a low single-digit percentage allocation. Fidelity Investments, the $2 trillion asset manager, found that a low single-digit percentage allocation has the ability to consistently improve the returns and minimize the losses of normal stock-bond portfolios.
In that same interview, he added that foreigners have been net sellers of U.S. Treasury bonds this year for the first time in many years. Druckenmiller said that he expects the U.S. dollar to slide against foreign currencies as a result.
A weak U.S. dollar is good for the gold market. And if what the investor says is to be believed as true, Bitcoin should outperform once the U.S. dollar slips lower.
Latest Legendary Investor to Go Long on Bitcoin
While the news is still spreading of this endorsement, many believe that this is on the same level as Paul Tudor Jones promoting Bitcoin in May this year, then a CNBC interview more recently.
As the BTC Times reported previously, Tudor Jones said in that recent interview that he thinks investing in Bitcoin now is like investing in Apple or Google early on in their lifespans.
The investor also said that he thinks Bitcoin is the best inflation trade, which is the same comment Druckenmiller basically stated.
Mike Novogratz, CEO of Galaxy Digital, said earlier this year that he thinks Tudor Jones is one of the four macro titans in the investing world. Another one of those titans is Druckenmiller.
What makes this news so notable is that it eliminates the career risk of entering the Bitcoin space, whether that's as an investor or as a "builder."
As Raoul Pal, CEO of Real Vision and a friend of Druckenmiller's, wrote on Twitter after he saw the CNBC segment:
"The significance of the world's greatest and most respected money manager - Stan Druckenmiller saying just now that he is long bitcoin can not be overstated. That has removed every obstacle for any hedge fund or endowment to invest…"