Bitcoin beats gold as an inflation hedge! Hedge fund veteran: US stocks are overvalued, making it hard to profit from the stock market over the next 10 years.

American billionaire investor and hedge fund mogul Paul Tudor Jones stated that in an era of soaring prices, Bitcoin is the most powerful "inflation hedge" on the planet. He emphasized that Bitcoin possesses the inherent advantage of a "fixed supply," making it superior to gold as an inflation hedge. He also warned that current U.S. stock valuations are at extreme levels, and making money in the stock market over the next 10 years "will likely be very difficult." In an interview on the financial podcast "Invest Like the Best" on Tuesday, Paul Tudor Jones pointed out: "Bitcoin is without a doubt the best inflation hedge, even better than gold." He stated that Bitcoin's absolute advantage is its "supply cap." Unlike gold, which still sees new annual mining output entering the market, Bitcoin has a fixed supply cap of 21 million. Paul Tudor Jones believes this innate, hard-coded "absolute scarcity" is the key to Bitcoin's success. Reflecting on past market cycles, Paul Tudor Jones further elaborated on the appeal of Bitcoin. He cited the stock market crash following the outbreak of the COVID-19 pandemic in March 2020 as an example, when central banks around the world joined forces to implement aggressive monetary and fiscal stimulus policies, flooding the market with liquidity, which led to the rise of "inflation hedge trades": When you see governments intervening heavily in the market and releasing massive amounts of liquidity... you should know in your heart that "Inflation Trades" (referring to buying assets that can preserve or increase in value in an inflationary environment) are ready to take off. He added that in an environment flooded with capital, Bitcoin is undoubtedly the most attractive investment opportunity. U.S. stock valuations are near their limits; profits may be hard to come by in the next 10 years However, compared to his optimism about Bitcoin, Paul Tudor Jones appears deeply worried about the current U.S. stock market. He warned that the overall valuation of U.S. stocks is at a historically high level, which often signals weak future returns. In addition, the market is about to see a wave of heavyweight Initial Public Offerings (IPOs), including Elon Musk's SpaceX, as well as AI giants like OpenAI and Anthropic. Coupled with the weakening momentum of corporate share buybacks, these factors will significantly increase the supply of stocks in the market, thereby putting heavy pressure on stock prices. He said: If you buy the S&P 500 at current high valuation levels, the expected return over the next 10 years will likely be negative. From now on, it will become very difficult to make money in the stock market. Although Paul Tudor Jones did not directly assert that there is a "full-blown bubble" right now, he specifically pointed out a key metric: the ratio of total U.S. stock market capitalization to GDP (often referred to as the "Buffett Indicator" in financial circles) is approaching historical extremes, with a level of danger comparable to the eve of previous market crashes. He illustrated: Looking back at the eve of the Great Depression in 1929, the ratio of U.S. market cap to GDP was 65%; during the 1987 crash, it was about 85% to 90%; and by the 2000 dot-com bubble, it soared to 270%. Paul Tudor Jones said: "And today, we are at a high of 252%. You can imagine the current situation; the leverage in the U.S. stock market is alarmingly high." Domino effect is a hidden concern: If the stock market crashes, the bond market and fiscal situation will suffer What Paul Tudor Jones worries about most is that if the U.S. stock market experiences a significant pullback, it could trigger a series of domino effects, impacting the real economy, government budget deficits, and even the bond market. He said: Currently, the U.S. government receives as much as 10% of its tax revenue from capital gains taxes. Once the stock market crashes, this tax revenue will effectively drop to zero. At that point, you will see the government budget deficit rise sharply, and the bond market will be bloodied as well. This is a "negative self-reinforcing" vicious cycle, which is truly worrying.