Bitcoin price hits $40K as Paul Tudor Jones slams Fed inflation claims
A stunning BTC price surge accompanies concerns over the United States Federal Reserve's "institutional credibility."
Bitcoin (BTC) passed $40,000 on June 14 as a consolidation period snapped to unleash a solid breakout.
BTC price breaks out past $40,000
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining 3% in under an hour, reaching $40,600 on Bitstamp.
The largest cryptocurrency capitalized on the upside that resulted from a new positive tweet by Elon Musk concerning Tesla possibly accepting BTC in the future.
Earlier, Cointelegraph reported on traders betting on a leg up to around $47,000 before a correction.
A look at buy and sell positions on major exchange Binance shows support at $38,000, with resistance at $40,500 — the next hurdle for bulls.
Paul Tudor Jones advocates 5% BTC allocation
Bitcoin reached a $2 trillion market capitalization because of a "dichotomy" in Federal Reserve policy that "questions" its credibility, said famous trader Paul Tudor Jones.
In an interview with CNBC on June 14, the founder of Tudor Investment Corporation sounded the alarm over advancing inflation.
After last week's consumer price index (CPI) report showed that United States inflation has hit a 13-year high, Bitcoin's deflationary nature has rarely looked so appealing.
For Jones, the idea that higher inflation is just temporary due to recent events — as suggested by the Fed and central banks in general — is a myth.
"It's somewhat disingenuous to say that inflation is transitory — for them to say inflation is transitory," he told CNBC's Squawk Box segment.
Today's environment is entirely different from those that saw episodes of inflation in the past, such as in 2013. As such, there is little sense in the Fed applying the same forecasts, Jones believes.
Jones noted that the CPI was much lower then, while now, unemployment levels and job offers also roughly equal each other.
Meanwhile, gold and Bitcoin have provided a refuge for many. Despite the precious metal vastly underperforming Bitcoin in terms of gains, it remains near record highs.
"When you look at the Fed today and the Fed back then, you wonder: How can you have such wildly different policy views on what constitutes the right levels for employment, the right levels for inflation?" he continued.
"How can you have that with an eight-year timeframe? It's almost like a split personality. And you wonder why Bitcoin has a $2 trillion market cap and gold's at $1,865 an ounce. And the reason why is because you have this dichotomy in policy that again questions — questions — the institutional credibility of something."
Ultimately, a 5% Bitcoin allocation is one of the only things he recommends to those seeking portfolio advice.
"I say, 'OK, listen. The only thing that I know for certain is I want to have 5% in gold, 5% in Bitcoin, 5% in cash, 5% in commodities at this point in time,'" he added.
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Cointelegraph Team
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