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It's been a tough go of it for Bitcoin (BTC -2.23%) recently, which is down 16% for the year. Yet, despite this disappointing performance in 2025, some of the world's smartest billionaires are actually looking for ways to ramp up their exposure to Bitcoin.
According to the latest quarterly Securities and Exchange Commission (SEC) 13F filings, billionaire hedge fund manager Paul Tudor Jones nearly doubled his stake in the iShares Bitcoin Trust (IBIT -4.14%) from 4.4 million shares to 8.1 million shares. As of mid-February, he had 4.5% of his $9 billion portfolio invested in this spot Bitcoin exchange-traded fund (ETF). So why is Jones so bullish on Bitcoin right now?
Bitcoin as the ultimate hedge?
The reason Jones is putting so much money to work in Bitcoin might surprise you. Yes, Bitcoin has remarkable upside potential, but he's particularly enamored of Bitcoin's potential to act as a hedge against inflation and economic uncertainty.
Last October, Jones made waves when he declared that, no matter who won the presidential election in November, "all roads lead to inflation." As he saw it then, the current U.S. economic situation was so untenable and the nation's deficit had grown so large, that the only way to deal with this economic mess was by inflating our way out of it.
The good news is that Bitcoin could be a potential hedge against these inflationary pressures. For nearly a decade, Bitcoin's proponents have emphasized its disinflationary features. The Bitcoin algorithm carefully controls how much Bitcoin can be created, and this cannot be changed by any corporation or government.
In fact, Bitcoin is often referred to as digital gold. Just like physical gold, it has a finite supply and inherent scarcity. Indeed, Jones says that both gold and Bitcoin are at the top of his investment agenda right now.
Of course, Jones' thinking might have changed since October. After all, President Donald Trump has now charged Elon Musk and his DOGE team with finding ways to curtail government spending. So maybe there is an alternative to printing more money and hyper-inflating the economy.
What else is Paul Tudor Jones holding?
It's interesting to peek under the hood to see what else Jones is holding to get a better sense of how Bitcoin fits into his overall strategy. Right now, his largest holding is the iShares Bitcoin Trust, worth an estimated $427 million.
His next three largest holdings are also ETFs: the Energy Select Sector SPDR Fund, the iShares Core S&P 500 ETF, and the iShares Russell 2000 ETF. Combined, they account for another 5% of his portfolio.
His largest single-company stock holding is Kellanova (K -0.09%), formerly known as Kellogg Company. Another top holding is Nvidia (NVDA 3.67%), although he recently slashed his position in it by 37% in the most recent quarter.
Building a portfolio with Bitcoin
Putting all this together, it's possible to see how to construct a winning portfolio that includes exposure to Bitcoin. For Jones, it means pouring money into the iShares Bitcoin Trust, which has more than $59 billion in net assets.
During the past several quarters, Jones has used the iShares Bitcoin Trust to ratchet up his Bitcoin allocation to nearly 5%. This is at the higher end of the suggested portfolio allocation range for Bitcoin and shows just how bullish he is. For example, BlackRock -- the company behind the iShares Bitcoin Trust -- recently said that 2% is the optimal Bitcoin allocation for most investors.
Also, keep in mind that 13F filings represent only a snapshot in time. While Jones has been very public in his views, and it's possible to deduce a lot about his overall investment approach, it's not known how his thinking has evolved over time. So it will be interesting to see what moves he has made recently once next quarter's 13F filings come out.
Bitcoin's risk-reward profile
Many investors tend to focus exclusively on Bitcoin's upside potential. They focus on $1 million price targets and the potential of Bitcoin to rise 10-fold or even 100-fold in value over the long haul.
However, Jones is apparently taking a more holistic look at the overall risk-reward profile of Bitcoin. In a market filled with uncertainty, Bitcoin might be able to provide the type of downside risk protection that other assets can't. And that could make it a very valuable addition to your portfolio right now.
