Billionaire hedge fund manager Stanley Druckenmiller is the latest high-profile investor to publicly disclose that he has invested in the bellwether cryptocurrency. During a recent interview with CNBC, the high-net-worth investor revealed that he also owns some gold. He, however, believes that his bitcoin investment will perform better than the precious metal.
Just like most legendary billionaire investors, Druckenmiller dismissed the flagship cryptocurrency in the past. His latest revelation, therefore, represents a complete u-turn in his outlook towards bitcoin.
Bitcoin May Be A Better Bet Than Gold: Stanley Druckenmiller
Speaking with CNBC on Monday, American investor Stanley Druckenmiller who was a successful hedge fund manager for around 30 years, praised bitcoin by positing that it “has a lot of attraction as a store of value to both millennials and the new West Coastline.” He further noted that bitcoin has been in existence for 13 years and that its brand as a store of value improves with each passing day.
Druckenmiller’s remarks come hot on the heels of a face-melting rally registered by bitcoin. The digital currency is up over 110% year-to-date after zooming past the $15,000 mark. This represents a close to fourfold growth from the mid-March lows.
Though he owns “many many more times” gold than bitcoin, his bitcoin bet will likely perform better than his gold allocation. “It’s thinner, more illiquid, and has a lot more beta to it,” Druckenmiller elaborated. Simply put, he thinks the top cryptocurrency has a larger upside potential than gold, despite his investment in the yellow alloy being significantly larger than his bitcoin stash.
How Did Stanley Druckenmiller Arrive At Bitcoin?
In June last year, Druckenmiller stated during an interview with the Economic Club of New York that he perceives bitcoin as a “solution in search of a problem. I don’t understand why we need this thing.” He added:
“I just don’t need to be playing in bitcoin; I wouldn’t be short it, I wouldn’t be long it. […] I don’t understand why it’s a store of value other than you can’t create it. Well, there are a lot of things you can’t create that aren’t going to go to a million.”
Fast forward to 2020, and Druckenmiller is a bitcoin investor. It is, however, not clear exactly how much money he has invested in the cryptocurrency. Regardless, the billionaire now singing bitcoin praises after previously bashing the asset is a welcome sight.
Ultimately, Druckenmiller’s bitcoin endorsement should not be downplayed as it marks a pivotal moment for cryptocurrency. As bitcoin evangelist and Wall Street veteran Raoul Pal put it astutely:
“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.”