What’s Going On?
Some of the world’s most high-profile billionaires are taking large, fresh stakes in cryptocurrencies.
Why Does It Matter?
These investors are backed by massive financial institutions.
First Bloomberg reported that George Soros’ New York-based Soros Fund Management had received the in-house go-ahead to trade virtual coins – just months after Soros himself delivered a withering critique of cryptocurrencies at the World Economic Forum in Davos. He said then that digital coins cannot function as genuine currencies because of volatility. Then Fortune magazine broke the news that Brooklyn-based cryptocurrency investor group CoinFund was working with old-money family the Rockerfellers via the company’s ventures investment division Venrock. “There are a lot of crypto traders in the market,” Venrock partner David Pakman told the magazine. “There are a lot of cryptocurrency hedge funds. This is different. In fact, to us, it looks a little bit more like venture capital.”
So Old Money Chasing New Money, Right?
Of course, but the billionaire players claim they have some worthy goals while on the paths to profit. Pakman
explained: “‘Commodity’ applications like messaging, social media and application infrastructure like file storage and compute become very much like public utilities. And they are owned and governed by their participants. For many of us, this is the mission behind crypto.” Pakman told reporters that one of the benefits of crypto is the requirement for fewer gatekeepers. “Venture capital itself is effectively a gatekeeper industry and I’d actually like to see that undone,” he said. “I don’t believe that a small group of people should make the decisions about which projects can raise some money and get off the ground.”