Cryptocurrency markets have had a wild ride over the past year. As general public interest peaked in late 2017, early 2018, we saw record price for most of the biggest cryptocurrencies. Since these highs the market has seen a severe decline. Price drops have been disheartening to those investors trying to become overnight millionaires but lately there has been good news and interest from big investors, like George Soros and the Rockefeller family.
Soros and Rockefeller Interest
George Soros, business magnate and investor, originally expressed doubts in cryptocurrency as recently as January 2018. Although no public statements by Soros have been made, he did give internal approval to his fund manager, Adam Fisher, to begin trading in cryptocurrency. Soros’ hedge fund has around $26 billion under management and could be a huge player in the markets. Soros has shown more indirect support for cryptocurrency as his fund bought around an 8.99% stake in Overstock.com late last year. Overstock.com was the first major retailer to accept cryptocurrencies, while also having plans for creating a cryptocurrency exchange and potentially offering its own digital currency.
The Rockefeller family has taken a more non-traditional approach to supporting cryptocurrency. Venrock, the Rockefeller venture capital fund, has partnered with Coinfund to help build out a crypto economy and infrastructure. Coinfund has experience in the industry, working to launch Coinlist, a financial services platform, and with Kik, the messenger app, to raise over $100 million in its ICO last year. The Rockefellers are making a long-term investment in the cryptocurrency markets. With Venrock’s $2.6 billion under management, cryptocurrency has seen a boost in the overall markets (see Figure 1 below).
Figure 1. Bitcoin price response to Rockefeller News
Cryptocurrencies reached record highs and lows this year (see Figure 2.1 and Figure 2.2 below). As major markets shifts increased price volatility, the market seems more unpredictable than ever. After the highs seen in January, crypto funds are down an average of 53%. The past one to two weeks have been good for the markets as they have gingerly appreciated in value.
Figure 2.1 Bitcoin Price 2018
Figure 2.2 Ethereum Price 2018
Big Players in Cryptocurrency Market
George Soros and the Rockefellers are definitely big players in cryptocurrency, but some more established individuals have shown their support for a longer time. The infamous Winklevoss twins hold around 31,000 bitcoins, which is valued at approximately $251 million. Major institutions, like Goldman Sachs, could be poised to take major positions in the cryptocurrency markets in 2018. Goldman Sachs is investigating offering an investment product based on these digital currencies. JP Morgan Chase, which has been critical before, has had a change of heart and CEO, Jamie Dimon, showed his interest in the underlying blockchain technology. Moneygram is experimenting with using Ripple (XRP) as a digital way to transfer money.
Big institutional investors create a mix of positives and negatives. The intent of these investors plays a huge role. Short-gain goals could mean greater volatility for cryptocurrency markets, especially with the introduction of future markets. If investors show their long-term support for cryptocurrency, then the markets and individual investors should be excited. Digital currencies are still highly volatile and sensitive to market news. As a general rule, average investors should be wary and only invest what they are willing to lose. Regardless, one thing is certain cryptocurrency is becoming a bigger deal.
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