Legendary investor George Soros, through his multi-billion-dollar family company, is planning to begin trading cryptocurrencies, in spite of the fact that this past January he called digital currencies a bubble.
Sometime in the past few months, New York-based Soros Fund Management gave Adam Fisher approval to trade cryptocurrencies. Fisher is responsible for macro investment at the company. According to sources within the company, though, he has yet to make any trades.
A spokesperson for Soros Fund Management declined comment on the matter.
Earlier this year at the World Economic Forum in Davos, Soros said that cryptocurrencies, because of their volatility, could not function as real currencies. Though at the time he did not predict the fall of them, like others in the financial industry did. Soros, who is 87 years old, told the forum that he believed that the increasing numbers of dictators around the world would keep bitcoin afloat, because they would use it to store the holdings that they amassed during their rules.
Since making this comment, bitcoin has lost more than 40% of its value. Due to their high volatility, some investors have shied away from trading digital currencies. In December, Mike Novogratz — who is a former hedge fund manager — decided against starting a cryptocurrency fund he had planned to launch. Instead, he is focusing on developing a merchant bank whose emphasis will be on cryptocurrencies. He is also interested in investing in companies developing technologies related to cryptocurrencies.
With hedge fund profits dwindling, other macro managers have shown an interest in cryptocurrencies. John Burbank, who is a former hedge fund manager who closed his main fund last year, hopes to raise $150 million for two funds focused on cryptocurrencies. At the same time, billionaire Alan Howard has made sizable cryptocurrency trades, though outside the scope of his company. It is said that he plans to make more investments in the near future, both in cryptocurrencies and the blockchain technologies behind them.
Indirectly, Soros has already been involved in cryptocurrencies. At the end of last year, his company took a significant stake in Overstock.com, becoming its third largest shareholder. In the summer of last year, Overstock.com became the first major retailer to accept cryptocurrencies on its site.