Paul Tudor Jones Says Bitcoin Is the Best Inflation Hedge and Warns Stocks Are Overvalued

TLDR

• Paul Tudor Jones calls bitcoin “unequivocally the best inflation hedge,” ranking it above gold due to its fixed supply
• Jones warns the S&P 500 is overvalued, saying 10-year forward returns could be negative
• U.S. stock market cap to GDP sits at 252%, near dot-com bubble levels of 270%
• A major stock market drop could blow out the federal budget deficit as capital gains tax revenue collapses
• Jones flagged cybersecurity and quantum computing as long-term risks to bitcoin despite his bullish view

Billionaire investor and macro trader Paul Tudor Jones said bitcoin is the strongest inflation hedge available today, ranking it above gold. He also warned that U.S. stocks are dangerously overvalued.

Jones made the comments on the Invest Like the Best podcast, published April 28, 2026.

Jones first bought bitcoin in May 2020, during the height of pandemic-era stimulus spending. At the time, he compared it to gold in the 1970s and called it part of a broader inflation trade strategy.

He described bitcoin’s 2020 surge as a rare “knockout” opportunity. The price climbed roughly 300% that year, rising from around $7,000 to nearly $29,000 by year-end, according to CoinGecko data.

Jones said these types of trades tend to appear when central banks and governments pump money into the economy, creating conditions where inflation assets outperform.

He did flag some risks. Jones noted that cybersecurity vulnerabilities and the long-term threat of quantum computing are real concerns for bitcoin as a digital asset.

Stocks Could Deliver Negative Returns Over the Next Decade

Jones turned sharply cautious on equities. He said that buying the S&P 500 at current valuations implies negative 10-year forward returns.

He pointed to the ratio of U.S. stock market capitalization to GDP, which currently sits at 252%. For context, that ratio hit 270% at the peak of the dot-com bubble in 2000. In 1929 it was around 65%, and in 1987 it reached roughly 85% to 90%.

A Market Drop Could Hit the Federal Budget Hard

Jones warned that a large stock market correction would have ripple effects beyond just portfolio losses.

He said around 10% of U.S. tax revenues come from capital gains. If the market falls sharply, that revenue could go to zero.

Jones also pointed to an increase in equity supply as a potential headwind. Upcoming IPOs from companies like SpaceX and AI firms, combined with reduced share buybacks, could add pressure on stock prices.

Bitcoin was trading at $76,148 at the time of reporting, down 0.9% in the last 24 hours.

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