Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

From President Donald Trump‘s tariff policies to the anticipated deficit hit from the “big beautiful bill” and even immigration, the U.S. market is rife with uncertainty.

But Tudor Investment Co-Chairman and Chief Investment Officer Paul Tudor Jones could not sound more sure about the short-term trajectory of the market when speaking to Bloomberg on Wednesday. In the famed investor’s telling, holding Bitcoin could be critical to navigating the coming economic climate.

Don't Miss:

• Trade crypto futures on Plus500 with up to $200 in bonuses — no wallets, just price speculation and free paper trading to practice different strategies.

• Grow your IRA or 401(k) with Crypto – unlock  the power of alternative investments including a Crypto IRA within your retirement account.

The U.S. is in “a debt trap,” Jones told Bloomberg, citing the country’s growing deficit. He said that the only way out of the debt trap was to reduce interest rates to save costs on debt payments. He said these interest rate cuts are likely to occur within the next 12 months, as Jerome Powell‘s term as Federal Reserve chair is scheduled to end next May.

“We’ll have a new Fed chair within six months at that point in time, and I think Trump’s going to pick someone who’s going to be uber-dovish,” he said.

Suggesting that anticipated interest rate cuts could produce an inflationary environment, Jones told Bloomberg that the ideal investment portfolio would include a mix of stocks, Bitcoin and gold adjusted for volatility. He said that is what has worked so far.

It is not the first time Jones has pitched Bitcoin as an inflationary hedge. In 2020, he acquired the asset and recommended a 1%-2% portfolio allocation to address anticipated inflation resulting from the money printing that followed the COVID-19 pandemic.

Trending: New to crypto? Get up to $400 in rewards for successfully completing short educational courses and making your first qualifying trade on Coinbase.

Jones on Wednesday seemed to still stand by his 1%-2% portfolio recommendation.

“Yeah,” he said when asked whether he stood by the recommendation. “Particularly now that the roadmap is clear. I mean, again, if I’m a policymaker, I’m going to run really low real rates. I’m going to have inflation running hot, and I’m going to tax the American consumer to get out of my debt trap.”

Meanwhile, in the longer term, Jones expressed some concern about the dollar and the stock market. He told Bloomberg that the market was currently in a “kayfabe,” referring to a make-believe scenario where, despite a growing deficit, the economy still appeared to be doing ok. He warned that a day could come when the bubble could burst.