Bitcoin has gained quite a bit of momentum this year and is adding fans to its roster at an unprecedented level. At the time of writing, the world’s number one cryptocurrency by market cap has added another newbie to its list of major admirers. That newbie is Stanley Druckenmiller, a legendary hedge fund manager who now says he owns some bitcoin for the first time – and he seems to like it.
Druckenmiller: BTC Is a Major New Asset Class
The idea behind bitcoin’s sudden rise in popularity is that since the dollar and other forms of fiat currencies are failing, bitcoin is serving as a hedge of sorts. People are rushing to get their fingers on the digital asset in their belief that the currency could potentially keep their wealth safe and sturdy during times of economic strife.
With so much money printing occurring as of late, many are wondering if fiat currencies are on the verge of losing value, and thus see bitcoin as a tool to keep themselves stable during very unstable times, and Druckenmiller is pushing this agenda.
In a recent interview, he commented that he now sees bitcoin as a valid store of value, commenting:
Bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they got a lot of it… It’s been around for 13 years and with each passing day, it picks up more of its stabilization as a brand.
At press time, some of the major names supporting bitcoin include Tim Draper, a venture capitalist who has claimed that the currency could potentially shoot up as high as $250,000 by the time 2022 or 2023 rings in. In addition, Mike Novogratz is a billionaire and former hedge fund manager who feels that bitcoin is on the verge of taking over the financial industry now that PayPal is allowing users to potentially purchase cryptocurrencies through its platform. He has commented that many banks will soon be rushing in to offer cryptocurrency services to their clients.
Druckenmiller has stated that the U.S. dollar is not in a solid place at this time. He has also commented that he feels bitcoin is a better bet than precious metals such as gold, though he admits that he holds a lot more of the latter. As it stands, the price of gold is just under the metal’s previous all-time high of roughly $2,000 per ounce, which was set earlier in 2020. Overall, gold has added about 30 percent to its price over the past year.
Becoming a Huge Fan
Frankly, if the gold bet works, the bitcoin bet will probably work better because it’s thinner, more illiquid and has a lot more beta to it.