(Noted News) — Soros Fund Management, the second most successful hedge fund in history according to Institutional Investor, is investing in the cryptocurrency space.
In an interview with Bloomberg Markets and Finance, Soros’ chief investment officer Dawn Fitzpatrick said that the $27 billion hedge fund believes that the crypto sector is at “an inflection point.”
“We think the whole infrastructure around crypto is really interesting and we’ve been making some investments into that infrastructure and we think that is at an inflection point. I’d say it’s everything from exchanges, asset managers, custodians, to the mundane tax reporting on your crypto gains, and everything in between.”
The CIO says that one of their major motivations behind their crypto investments was the increasing concern of government money printing.
“We think that’s interesting so when it comes to crypto, generally, I think we’re at a really important moment in time in that something like Bitcoin might have stayed a fringe asset but for the fact that over the last 12 months we’ve increased the money supply in the US by 25%, so there’s a real fear of debasing of fiat currencies.”
“It’s a commodity that’s easily storable, it’s easily transferable, the IRS classifies it as a physical asset, it has a finite amount of supply, and that supply halves every four years so I think it’s interesting.”
Fitzpatrick also notes that despite every possible fundamental factor lining up perfectly for gold, the yellow metal has been in an underwhelming downtrend since August of 2020. In her opinion, Bitcoin is most likely stealing some of its share of the market.
“I think when you look at gold price action in the context of a fairly robust inflation narrative of late, it’s struggled getting traction and I think that’s because Bitcoin is taking some of its buyer base away.”
Fitzpatrick’s thesis about the relationship between gold and Bitcoin echoes Michael Saylor of business intelligence giant Microstrategy. According to Bitcoin Treasuries, Microstrategy owns 91,000 Bitcoin, valued at over $4.5 billion, making it the largest known accumulation of Bitcoin on a company balance sheet.
Saylor says gold is dead money that everyone should sell in favor of Bitcoin
“Gold is dead money. Sell your gold, buy Bitcoin because other people are going to sell their gold and if you wait until you’ve been front-run by all the hedge funds when they dump their gold, you’re going to be the last person out. I think gold is getting demonetized…
“There’s $10 trillion worth of monetary energy in gold right now. Eventually, it will only be the central banks that will want to hold it. Every private rational actor is going to move out of it and move into Bitcoin.”
“What is it good for? People held gold for political unrest. Lord knows you’ve got enough of that this year. They hold gold as a hedge against money printing. We’ve got a lot of that this year. Why hasn’t gold tripled? Look at every asset class for the last six months. Look at gold, look at NASDAQ, look at the S&P, look at bonds. They’re all chopping. They’re not going anywhere. What’s working? Bitcoin’s working. It’s tripled or quadrupled, but let’s say tripled easy.”