Investors hedge funds and Tudor Investment Corporation founder Paul Tudor Jones said a turning point in bond yields would be a sign that Bitcoin and stock prices are starting bull run.
Jones emphasized that crypto assets will reap the benefits of these conditions. Therefore, he urges investors who want to buy stocks and cryptocurrencies to keep an eye on short-term bond yields.
Bitcoin and Stock Price Fate
At the event CNBC SquawkBox, Jones believes stocks and bonds will continue to weaken as the US economy heads into recession in the coming months.
Even though retail investors are losing money on stocks and bonds, the explosion of volatility in the capital markets will provide many opportunities for investors traders macroeconomics like Jones.
“Now is a spectacular time for traders macro, and this time is generally not good for investment in general,” explained Jones, quoted from Market Watch.
Jones added that macro trading is effective when the economy is in turmoil. The reason, there is a suitable volatility for the Jones trading technique.
Volatility has increased across various asset classes as the US central bank Federal Reserve embarked on the process of reducing its balance sheet by US$9 trillion and increasing its benchmark interest rate aggressively.
The ICE BofA MOVE index which tracks fixed income volatility hit its highest level since 2007 when it hit 158.99 before dropping again. The CBOE Volatility Index, or VIX, climbed up to 33.07 as the S&P 500 weakened.
Currency market volatility also spiked as the USD strengthened at its fastest pace in years thanks to the Fed’s monetary policy. The US Dollar Index DXY is up nearly 18 percent since the start of 2022.
Jones provides strategies for investors to navigate the capital market when it happens recession. According to Jones, the benchmark interest rate will stop rising and start declining before Bitcoin and stock prices form a bottom area.
“When we are in a recession there will be a point where the Fed stops raising interest rates and starts to slow down and even reverse the increase. After that there will be a strong rally in various inflation-hit assets, including cryptos,” Jones said.
Jones admits he has small crypto deposits.
He added that there would be a fiscal delay. When large amounts of money are available, cryptocurrencies especially Bitcoin (BTC) and Ether (ETH) will be of value. [ed]