After Calling Crypto a Bubble, George Soros is Investing in Cryptocurrency

There are hardly any cryptocurrency reports that don’t mention price volatility. In fact, this quality is what the industry has come to be known for over the years. Cryptocurrencies on their own have no intrinsic value and present so much risk of loss. For this reason, huge corporations and big Wall Street players like George Soros, Warren Buffet, and Jamie Dimon have always been openly skeptical about all coins, the major ones in particular like bitcoin, litecoin, and ethereum. While there are differing opinions that dispute the criticism meted out by these senior investors, their words are backed by years of accumulated knowledge and experience in the finance industry.

However, despite its volatility, the cryptomarket is very similar to the stock market. This means that technical knowledge of blockchain is not necessarily a prerequisite for investing in the industry. All that is needed is a fundamental understanding of supply, demand and other economic factors that drive the market. Keeping this in mind, George Soros is set to invest in cryptocurrency despite his earlier criticism.

The 87-year-old tycoon has racked up a sizeable investment portfolio over the years, and while his peak days may be behind him, he has made it clear that he’s not done yet. His perception of Bitcoin was especially negative, and he considered it a confusing form of investment that is completely based on a misunderstanding. For someone who lambasted the whole idea of crypto assets, it’s easy to wonder why Soros has suddenly had a change of heart.

Soros Prepares to Invest in the Cryptocurrency Market

According to Soros, Bitcoin fluctuates in value by at least 25% each day, making it impossible for the currency to be used to pay wages and other compensations. In January 2018, Soros openly stated that Bitcoin is a bubble, saying that it cannot be called a currency because it has no stability as a store of value.

The Soros Fund Management has assets worth $26 billion and part of it has been set aside as capital for cryptocurrency investments. Bloomberg reported that Adam Fisher, head of macro investing at Soros Fund Management has received internal approval to carry on with the trade of digital assets. Although he has indeed received the approval, he has not personally made any bets on digital assets yet

George Soros is not the first Bitcoin critic to change his stance. The history of Bitcoin has seen many public figures who openly show skepticism and disinterest in the cryptocurrency, only to change their minds later and invest in it. Jamie Dimon, CEO of J.P. Morgan who called Bitcoin a fraud in October 2017, has also changed his mind. Older, more traditional firms are also taking an interest in the industry, with venture capitalists like the Rockefellers making moves to enter it. Despite his next foray into the crypto markets, George Soros believes that Bitcoin is mainly used by individuals for tax evasion and by dictators as a way to build nest eggs in other countries.

The Cryptocurrency Investment Decision

The decision of the Soros Management Fund to consider cryptocurrency trading is a result of the falling price of Bitcoin in 2018. Since its peak of $20,000 in December 2017, the price of BTC has dropped to almost $6,000 in a devastating market correction. Bitcoin volatility has surpassed expectations several times. Its performance in 2018 has been no different, with the continuous fluctuations on the 24-hour market chart.

Since early 2018, BTC has seen bearish movements where it continues to lose support. Between January and March, invested cryptocurrency funds generally declined by an average of 52% in value. Hedge funds, on the other hand, appreciated by an average of 0.4%. George Soros sees this negative volatility as one of the pitfalls of investing in Bitcoin, and it is no surprise that other Wall Street players agree. However, compared to the price of BTC in January 2017, there has been an upside bullish movement. The average return of funds invested in cryptocurrency in 2017 was 1,522% which is massive, compared to the average return on hedge funds which was 7.2%.

There is speculation that the negative comments by Soros played a part in the BTC price drop. His knowledge of macroeconomics has set him apart as a person who influences the investment scene. Since Soros made his comments, the markets have seen a 41% decline. If indeed he ends up investing in crypto assets, the markets may see a short-term boost. This doesn’t matter to big investors like George Soros who are more focused on the long-term rewards in the industry. Whether he has an agenda or not, one thing is certain: profit is a major driver in his decision.

There is no doubt that the best time to invest in cryptocurrency is now because the price of Bitcoin has dropped considerably. Although there have been predictions by notable experts like CNBC’s Brian Kelly and John McAfee that the cryptocurrency will recover, it may take a while for that to happen. George Soros knows this and plans to capitalize on it.

John McAfee has predicted that Bitcoin will hit $1 million in 2020 and if its price is anywhere near that figure, then putting funds in the market when it is worth $6,000 is a great investment. However, people like Jordan Belfort have also predicted that Bitcoin will crash. Recently, there has also been tension and new unfavorable regulatory developments in the space. Investors are discouraged by the continuous regulatory scrutiny and hacks that plague the entire industry. This has led to a general decrease in the interest and buzz around Bitcoin.

Final Thoughts

George Soros is a Hungarian-based American billionaire who is considered a tycoon in the world of business. He has proven himself time and again as a true macroeconomic guru. His predictions and statements are regarded in high esteem and trust, globally.

George Soros might be seen as a controversial person for several reasons, but where investments are concerned, he’s hardly wrong. So when he came out to say that Bitcoin cannot function as an actual currency, it caused a buzz. However, he failed to predict Bitcoin’s hard tumble which he now finds favorable.

Soros’ family office has a stake in Overstock.com and is currently the company’s third-largest shareholder. The retail giant was one of the first companies in its industry to fully embraced the use of cryptocurrency. In fact, it planned to launch its own cryptocurrency exchange. So in some ways, this is not his first encounter with crypto investments. Unfortunately, the company has come under the scrutiny of the SEC for its planned Initial Coin Offering (ICO). This has led to a whopping 43% year-to-date decline in the company’s shares.

Although Soros has expressed his intentions to move into the industry, the specifics are still unclear. There is still a lot of speculation about what his exact motives are. For now, he seems to be fine with the performance of Bitcoin because the current decline may signal a price growth in the near future. Wall Street moguls like the Rothschild family and Alan Howard are following in Soros footsteps as well. Clearly, cryptocurrency is becoming increasingly popular in the traditional finance industry. At this pace, mainstream adoption may not be as far off as it seems.

Investment ideas for beginners

Are you letting your money work for you? If not, you are missing a great opportunity to increase your personal wealth. Keeping money in a low interest account isn’t going to accomplish this. By choosing to invest your money in stocks, bonds or other options, successful investments will generate more cash for your future goals. Consider some of these potential investment alternatives.

Bitcoin

Different than other investments, bitcoin is a currency that can be used in a number of ways to help increase one’s wealth. The most common method is simply to purchase the bitcoin currency, anticipating it will increase in value. The currency is very popular with online websites including online casinos and at mobilecasinocanada.ca, they are considering the use of Bitcoin with other online banking methods.

Certificates of Deposit

CDs permit investors to invest their extra cash. This particular investment can vary in terms. Some CDs are short term with only three months while others can be as long as 5 years. Of course, one’s specific needs will determine the better term option. However, generally the longer the investment, the better your return on investment will be.  Shop around when looking to purchase CDs as banks do vary in regards to their rates.

Peer to Peer Lending

While this is a relatively new idea, peer to peer lending bypasses traditional banks and connects consumers looking to invest with those needing a loan. Notes are purchased by investors from websites. Borrowers must go through a thorough vetting process which helps reassure investors of repayment. Each month lenders will receive a payment consisting of principal repayment along with interest.

You may choose to try one of these investment ideas or perhaps another way to let your money work for you. No matter what you decide, one important thing to remember is that you must be diligent researching any investment prior to making it.

Stock Investing Don’ts: learning from others’ mistakes

Stock investing is a good thing: you get a say in a company you believe is bound to success. You earn dividends from the company’s earnings. You sell a part of your share when the price goes high, and so on and so forth. So, you could assume it’s a pretty advantageous way to invest your money with the expectation to get profitable returns. But if you are a rookie in this just wanting to start out, there are a few things to should keep an eye on. Stock investing is an interesting sphere. You have to have, what’s best called, a special sense of feeling when to make certain actions. If the prices go up, down, or somewhere unknown, or if you are hyped about investing all of your money in one place, there are a few DON’Ts you will have to know about in order to eliminate risks and invest smart.

DON’T N1: Do not make emotional investments

Emotions are not acceptable in this tricky world of stock investments. I mean, if you love investing, that’s a good thing, means you are enjoying the process. But, do not let your emotions have control over your investment decisions. Under all circumstances you have to remember to take a “sober look” at the situation and remain rational. Do not panic and withdraw your money right away when you see the stock market going down the road, like many people did during the Great Recession back in 2008. Do not give in to emotional outburst of anger or fear to keep you from taking a step up into a bigger opportunity. In a similar manner, do not get too attached to the ownership of a share to the point of not willing to sell it when it needs to be sold. The examples are numerous, the moral is one: stock market is a place where emotions should not be allowed. All of your actions and decisions should be made solely based on research, data and your senses, which are way rational than your emotional feelings towards a certain asset or share.

DON’T N2: Do not overinvest. Just. Don’t.

Investing in stock market is a good place to put your money in. However, you should do it wisely, because too much of everything can harm. Investing all your money once and for all is not the smartest decision ever. You should be able to invest some at a time. Everyone knows that in stock market you should buy shares when they cost low and sell them when they reach their peak. Investing all of your hard-earned money at once will defeat the purpose of investing and trading wisely.

DON’T N3: Do not try to put the stock market into time frames, you’ll fail

Don’t get me wrong, you can, in fact, make good assumptions and predictions about when the market is more likely to hit the downroad or the opposite. But do not try to underestimate the abilities of the market to surprise you and hit you right back. Putting time limits and frames on how the market will perform in a month can be done only based on years’ of experience topping with good research, valid data and understanding of the spectrum in the first place. But other than that, you shouldn’t be timing the stock market, it will find a way to make you pay for it, literally.

DON’T N4: Conformity is not a smart thing in stock investing

You know there are people with no guts of their own, willing to make money  through stock investing without actually having their own ideas, motives, understanding and readiness to, actually, invest. Believe it or not, but people do lose their “individuality”, as investors, while trying to follow the crowd when the market is at its worst or the opposite. 2008 is a great evidence to that. Funny thing is, no one knows how and when the market will perform as expected, so conforming to the decisions of a few investors is not a good idea. Investing in the stock market is an individual thing as well. One might get away with investing all of his money into one company, whereas you might lose a big portion of yours if you went with the ‘all or nothing’ motto. Do your own research and study, collect your own data and, most importantly, make your own decisions while investing.
Do not rush the stock market and do not expect it to fulfill your expectations, because it won’t, and that is, frankly, the intriguing character of stock investing.