Crypto Disrupt published an article a few days ago stating that George Soros has now given the go-ahead for his hedge fund to invest in cryptocurrencies. Since Bloomberg made the announcement, much has been written about the Soros style of investment and George Soros himself.
Reddit, in particular, has many threads, and it’s quite clear that some people despise the man. They blame him, personally, for almost breaking the Bank of England and inflicting similar woes on the Thai Baht. In fact, it was probably the national banks of England and Thailand that were at fault, and he simply saw the writing on the wall thus gaining financially from it.
Others welcome the thought of the world’s best investor having a change of heart and deciding to consider crypto investments. Soros certainly has the funds at his disposal to have an impact on cryptocurrencies, but will he go long or short? Maybe at the Davos Forum, he had already decided to short bitcoin and knew that his comments would bring the price down. Most of the experienced investors understood that the parabolic growth of bitcoin couldn’t be sustained and that, in all likelihood, a correction was coming. With bitcoin down around 65% from the all-time high (ATH) of close to $20,000, does Soros feel he can take the price lower, or does he think we could see the price return to the ATH?
With the futures market for Bitcoin provided by CME and Cboe, which started towards the end of 2017, it’s now much easier for an investor to go long or short. The big investors, or whales, don’t always have it their way though. In October 2014, one whale sold 30,000 Bitcoins at $300 each, and almost everyone expected the price to crash. The price actually went up quite quickly, beyond $375, making it a very expensive short for the whale.
Soros is perhaps best known for his profitable short trades, but that doesn’t mean he never goes long. The short trades made by Soros are more notorious because some see it as a sinister plot to overthrow governments or harm entire nations whereas longs are considered normal trades in a growing economy. Providing bitcoin isn’t pumped above $9,000 before Soros starts investing, if he hasn’t already, perhaps he will go long.
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.