George Soros is planning to trade cryptocurrencies. According to Bloomberg, Adam Fisher, who is responsible for global macroeconomic investing at Soros Fund Management, has already received internal approval for cryptocurrency operations, although he has not begun trading yet. At the World Economic Forum in Davos in January 2018, Soros said that digital coins could not function as actual currencies because of their volatility.
“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 (EXANTE: Bitcoin) to build a nest egg abroad,” said Soros in Davos.
Right before that Soros amassed a stake in Overstock.com in the fourth quarter, making the billionaire investor and philanthropist the third-largest shareholder of the discount online retailer. In August 2017 the company became the first major vendor to accept digital currencies.
Overstock.com has also discussed plans to start an exchange for cryptocurrencies, as well as offer digital coins that could trade on the platform.
The Rockefeller family’s venture-capital arm is also moving into cryptocurrencies. Its fund Venrock is partnering with the cryptocurrency investor group, CoinFund, to help entrepreneurs launch blockchain-based businesses.
“We wanted to partner with this team that has been making investments and actually helping to architect a number of different crypto economies and crypto token-based projects,” Venrock partner David Pakman told Fortune.
Venrock is reportedly managing $2.6 billion in assets. The Rockefeller dynasty is one of the richest families in the world, with an estimated net worth topping $1 trillion.
Billionaire hedge fund trader John Burbank, a founder of Passport Capital, plans to add $150 million to its two funds dedicated to cryptocurrency investments. He has already started negotiations with potential investors.
Billionaire Alan Howard has also personally decided to invest in cryptocurrencies – these investments will remain separate from his company. He plans to put more of his own money into digital assets.
Pakman also said that Venrock is less concerned about short-term profits than in making a long-term investment in blockchain technology and the virtual currency industry.
“There are a lot of crypto traders in the market,” Pakman said. “There are a lot of cryptocurrency hedge funds. This is different. To us, it looks a little bit more like venture capital.”
“Soros and John Rockefeller’s descendants’ investments in crypto are observed as positive signs to the whole market,” says Pavel Schipanov, head of analysis and research at the Independent Capital Blockchain Fund (ICBF). “We can compare it with nothing but the discovery of the Americas by Christopher Columbus or Yuri Gagarin’s flight to space.”
According to Schipanov these decisions are made not by the billionaires themselves, but by their associates. Nevertheless, this news has given investors confidence in cryptocurrency markets.
“We can recall a first phase of Bitcoin development, when it stayed attractive merely for IT enthusiasts from 2009 till 2017,” Schipanov said. “At the end of 2017 financial giants found out about Bitcoin futures, which resulted in rising prices.”
By the end of 2018 Schipanov expects Bitcoin to achieve a benchmark of $12,000 - $13,000, but according to him, what is more important is that equity funds can start investments into cryptocurrencies. Bitcoin has already risen in price because of the large purchases through Bitfinex, the main Bitcoin exchange platform, but according to analysts other currencies have succeeded simply based on the rumors about the involvement of the Soros and Rockefeller funds.
The explosive growth of Bitcoin has been caused by other reasons according to Mikhail Mischenko, an analyst at eToro, a leading investment network. He sees the possible legitimization of currencies at an international level as the main consequence of the Soros and Rockefeller initiatives. However, these funds can’t inject too much money into the crypto market.
“Another drawback of this movement is that big money can cause a motivation shortage by digital currencies developers,” Mischenko said. “They do not need ICOs anymore and can gain enough capital from institutional investors, which is why mostly perspective projects can lose their founders.”
The time for speculation is over, claims Maria Salnikova, a head analyst at the consulting firm Expert Plus. According to her, the Bitcoin rally in 2017 was initially based on nothing more concrete than emotional expectations, however, in the future the exchange rate could be much more stable.
“For those who bought Bitcoins for $16,000-17,000 there are still not many options to get out,” Salnikova said. “Even George Soros can make some money on these currencies, but recalling his former experiences, usually he is the only one who wins.”
By Alex Lossan