Paul Tudor Jones.

REUTERS/Eduardo Munoz

• Bitcoin's October rally will continue as investors start scooping up the token as an inflation hedge, the billionaire investor Paul Tudor Jones said Thursday.
• The world's largest cryptocurrency is up nearly 20% this month and recently rallied above $13,000 for the first time since July 2019.
• With the Federal Reserve set to pursue price growth above 2% in the future, bitcoin will serve as "the best inflation trade," Jones said on CNBC.
• Betting on the cryptocurrency is also like making an early investment in a tech behemoth like Apple or Google, he added.
• Watch bitcoin trade live here.

Bitcoin recently spiked to its highest level since July 2019, and the hedge-fund manager Paul Tudor Jones expects inflation trends to boost the digital token even further.

The world's largest cryptocurrency is up nearly 20% this month after breaking through key psychological levels and gaining approval from financial-industry titans. Wednesday saw bitcoin rally above its 2020 peak to an intraday high of $13,229.37 before paring gains.

The cryptocurrency hovered just below $13,000 on Thursday, and the rally is still only in its "first inning," Jones said on CNBC on Thursday. The Federal Reserve's updated policy framework will allow for brief overshoots of its 2% inflation target to offset the slowed pace of price growth, he said. The new strategy has investors looking for new inflation hedges as the economy recovers, and Tudor Jones views the cryptocurrency as the strongest bet.

"I came to the conclusion that bitcoin was going to be the best inflation trade," Jones said.

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Bitcoin bulls have long praised the token for its potential as an inflation hedge. Since the coin is separate from traditional currencies, its value is insulated from inflation rates and, more broadly, monetary policy.

Tudor said he also viewed bitcoin as an early bet on a tech breakthrough, similar to holding Apple or Google shares early in the companies' lifetimes. The cryptocurrency has backing from "really, really smart and sophisticated people," he said. The founder of Tudor Investment Corp. added that he had a small single-digit stake in bitcoin.

Tudor's comments were the latest to fuel the coin's surge from March lows. Bitcoin gained in Wednesday trading after PayPal announced it would allow its users to buy, sell, and hold cryptocurrencies starting in a few weeks. Square made a $50 million investment in bitcoin earlier this month, and Fidelity rolled out its first bitcoin-focused fund in August.

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The billionaire investor Mike Novogratz tweeted on Wednesday that PayPal's move was "the biggest news of the year in crypto."

The token is up more than 78% year-to-date but remains far from retaking its December 2017 peak of nearly $20,000. Bitcoin traded at $12,866.39 as of 10:25 a.m. ET.

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