The Crypto Craze: Billionaires Joining the Bitcoin Bubble Burst

What caused wealthy individuals such as George Soros, Mark Cuban, and others to alter their opinion on Bitcoin and enter the world of cryptocurrency?

George Soros, a billionaire and renowned investor of Hungarian and American descent, is famous for his keen financial acumen and daring decisions in the realm of investments.

In January of 2018, Soros was in the news after his remarks at the World Economic Forum in Davos where he labeled Bitcoin as a “bubble,” drawing a parallel between the current crypto craze and the tulip mania that occurred in the Netherlands in the 1600s.

Surprisingly, Soros Fund Management announced in October 2021 that it had entered the cryptocurrency realm by acquiring Bitcoin.

In the first quarter of 2024, the Soros Fund Management continued to show interest in cryptocurrency. They raised their investment in MicroStrategy, a company with a strong focus on Bitcoin, and now hold assets worth more than $135 million.

Can you explain the changes in Soros’s views on cryptocurrency over time, and which other wealthy individuals have become interested in cryptocurrency? Let’s explore further and discover the specifics.

“Transitioning from Doubter to Supporter: Soros’s Evolving Position”

During his speech at the 2018 Davos conference, George Soros expressed doubt about Bitcoin (BTC) and referred to it as a traditional bubble. He also raised concerns about its instability, asserting that this made it inappropriate as a form of currency.

Soros stated that Bitcoin does not qualify as a currency because a currency is expected to have a consistent value. With daily fluctuations of 25%, it cannot be relied upon for tasks like paying wages, as they could potentially decrease by the same amount in a day.

Although he had hesitations about Bitcoin, Soros remained hopeful about the fundamental blockchain technology. He recognized its potential for positive impact, especially in safeguarding the finances of migrants.

In October 2021, Soros Fund Management disclosed ownership of Bitcoin. Speaking at a Bloomberg event, Dawn Fitzpatrick, the fund’s CEO and chief investment officer, mentioned the holding of “some coins,” although not a significant amount.

Soros Fund Management increased their presence in the cryptocurrency industry by December 2022. They acquired $39.6 million in convertible debentures from Marathon Digital Holdings, a leading crypto mining company.

Convertible debentures are long-term debt instruments that can be converted into stock, showing Soros’s strategic approach to gaining exposure to the crypto market.

Furthermore, the fund purchased significant stakes in MicroStrategy. According to Soros’s submissions of form 13F to the Securities and Exchange Commission, they disclosed holdings of both call and put options for MicroStrategy stock, as well as approximately $200 million in preferred shares of MicroStrategy.

As of May 2024, the Soros Fund Management’s stake in MicroStrategy has increased significantly, with assets worth more than $135 million.

This investment is significant because MicroStrategy has been heavily involved in the Bitcoin industry.