- Hedge fund managers are eyeing Bitcoin as a diversifier for their portfolios.
- George Soros has started to trade in Bitcoin while also looking at other cryptocurrency investment opportunities.
- It is not yet certain which way Soros will trade Bitcoin or whether his entry will hinder or benefit the market.
- George Soros’ foray into the Bitcoin market has not impacted Bitcoin’s price.
The market’s current downtrend is an alluring prospect for new institutional investors and traders. Smart and effective trading is conducted when security or stock is purchased low and sold high. Bitcoin’s trajectory has given multi-billion dollar hedge funds cause for consideration to capitalize on the current price range. A report from The Street denotes that George Soros gave the “green light” on Bitcoin.
Soros’ Bitcoin Apprehension.
Soros, the man who “broke the bank of England,” is reportedly starting to trade Bitcoin. The information comes from a report on The Street, which cites two sources underpinning Dawn Fitzpatrick, the CIO of Soros Fund Management, as the one who gave the “internal green light” for the trade of Bitcoin. The motto of “catching new trends early” certainly rationalizes why Soros is now considering taking a position in Bitcoin, given the current downturn of the currency.
Dawn Fitzpatrick alluded to Bitcoin as at an “infectious point” earlier this year; The Street reports that “sources familiar with the matter” suggest Soros Investment Funds are now looking to juggle Bitcoin and other cryptocurrencies. In 2018, when Bitcoin’s value plunged in the aftermath of a bullish rally, Soros reportedly sent an internal memo approving Bitcoin trading. A Bloomberg report indicates that Adam Fisher received internal approval, similar to 2021, but did not invest.
Hedge Funds are Acknowledging Bitcoin
Bitcoin is building steam among hedge funds as a hedge against inflation. Yet, in analyzing Bitcoin’s inflows and outflows, investors are not yet confident enough in the asset. In stark contrast, Morgan Stanley (NYSE:MS) has acquired 28,000 shares in Grayscale Bitcoin Trust, while 640 banks in the U.S. are set to offer BTC to their clients as an investment option.
These positive developments have seemingly gone overlooked in market sentiment as Bitcoin continues to trade sideways. Even so, investment funds are toying with the prospect of dabbling in crypto investments. Point72 is searching for a head of cryptocurrencies, though the specifics of the position are as yet unknown. Furthermore, Brevan Howard Asset Management and Tudor Jones have started their own investments into cryptocurrencies.
The ever changing anecdotes from digital banks explain the increased attention being paid to cryptocurrencies by hedge funds. As China explores digital currencies in the form of CBDC, investors are attempting to get ahead of the curve. The European Central Bank (ECB) published a report on the dangers associated with not-self issuing CBDC. As a result, Bitcoin and other digital assets have become more relevant for investors as easily tradable and interactable commodities.
On the Flipside
- The price of Bitcoin receded after the news broke out that Soros was trading Bitcoin.
- Soros called Bitcoin a “typical bubble” in 2018 before internally approving trade in the asset.
- Bitcoin could see similar price manipulation as that of Elon Musk, only this time it would mean higher capital input.
Where Is Bitcoin Heading?
Dylan McClair, the author of Daily Dive, compares Soros’ approach to Michael Saylor’s strategy of adding Bitcoin to MicroStrategy’s balance sheets. He argues that, unlike FIAT, Bitcoin is not a liability for anyone, while FIAT is “created through lending.” Thus, buying stronger currencies that are comparable by scarcity, such as in the case of Bitcoin, will allow them to short weaker currencies, which are considered a liability.
Soros’ entry to the crypto market has been met with skepticism. Dylan McClair argues that multi-million dollar capital flowing into Bitcoin and other digital assets can be a double-edged sword, as Soros’ primary goal is to generate profit, regardless of the means. He went on to assert that they “don’t play nice.” Anthony Pompliano has also shared his views, recognizing that Bitcoin’s value will depend on how Soros and other high capital firms “decide to trade it.”
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