Back in January 2018, the multi-billionaire announced that cryptocurrencies were a ‘bubble’. He hasn’t been the only one to say this, of course. However, in the last week he seems to have quite radically changed his mind about this, as his ‘family office’, valued at $26 billion, has announced via Bloomberg and other media outlets, that it plans to trade digital assets.
Soros Fund Management, which is based in New York, and its macro investing division headed by Adam Fisher, got the green light internally to trade in digital currencies, although Bloomberg says he has yet to actually make a trade.
When Soros spoke at the World Economic Forum at the beginning of the year, he was scathing about crypto and claimed it could never function as a viable currency. He also said: “As long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad.” This is similar to the many, many commentators on cryptocurrencies who have tried to tarnish the reputation of Bitcoin and other altcoins by connecting crypto with either the nefarious dark net, or with those who seek to beat the system in some way.
However, he didn’t predict what would happen to the cryptocurrency in the first quarter of 2018. The precipitous drop in the Bitcoin market cap sent some, like hedge fund manager Mike Novogratz, scurrying away from trading in cryptocurrency. For example, Novogratz decided against setting up a crypto fund, but has pursued links with a merchant bank that focuses on cryptocurrencies and blockchain technology ventures.
But other hedge fund managers in macro investing have been turning towards it as hedge fund profits slide. John Burbank is one example, He closed hi main hedge fund and “plans to raise $150 million for two funds investing in digital currencies,” says Bloomberg.
And Soros has been betting on cryptocurrencies, even if it is by a roundabout route. At the end of 2017, his firm acquired a large stake in Overstock.com, which is an online discount company. It accepts payment in cryptocurrencies and was the first major retailer to do so. Overstock then announced it would launch a digital currency exchange and an ICO, but this awakened the SEC last month, and it is investigating the proposals. Consequently, Overstock’s share price dropped.
Nevertheless, let’s remember that George Soros had, and still has, skin in the game, whilst warning the world that Bitcoin et al, are in a ‘bubble’.