Moves by two Wall Street whales to invest in bitcoin suggest that cryptocurrency is anything but a blip on the futuristic radar, and even if they didn’t manage to staunch the sell-off entirely, it’s a major sentiment boost for crypto.
Over the past few days, two billionaire heavy hitters—George Soros and Rockefeller conglomerate’s venture capital arm, Venrock—have made weighty announcements of big bets on cryptocurrency.
Last week, Soros—the billionaire investor famous for breaking the Bank of England in the 1990s—gave the green light to the $26-billion Soros Fund Management to start trading in cryptocurrencies.
It was a major departure from Soros’ crypto sentiment just a few months ago. In January, the billionaire philanthropist had said that digital coins wouldn’t be able to function as actual currencies because they were too volatile. But he also suggested that dictatorships would keep them afloat.
It wasn’t exactly an advertisement for investing in bitcoin. It also wasn’t a sounding of the alarms that the bitcoin bubble was ready to burst …
Right behind him came another billionaire announcement, this time from VC firm Venrock, the venture capital arm of the financial empire launched by John D. Rockefeller.
Venrock’s announcement Friday was even more exciting for crypto enthusiasts because the firm has partnered with New York-based CoinFund in a move that goes deep into blockchain and crypto, and into long-term support of the industry.
“We wanted to partner with this team that has been making investments and actually helping to architect a number of different crypto economies and crypto token-based projects,” Venrock partner David Pakman told Forbes in an exclusive interview Friday.
Venrock has thrown in with CoinFund because it’s backing a handful of prominent blockchain projects, according to the Forbes interview. Among them are CoinList (the newest), which is a spinout of AngelList that will help companies work toward compliant ICOs, chat app maker Kik, and Telegram, the multibillion-dollar ICO. Related: Bitcoin Could Find Its Footing After Tax Day
“Venture capital itself is effectively a gatekeeper industry and I’d actually like to see that undone,” Pakman 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.”
In the immediate aftermath of Venrock’s announcement, Bitcoin gained 3 percent, reaching above $7,000, but by mid-afternoon Monday, it was losing 6 percent in a matter of two hours.
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But the billionaire response will be back: The overall sentiment is that bitcoin’s loss today is a result of sell-offs as the income tax filing deadline approaches.
Speaking to CNBC Monday, BlockTower Capital partner Ari Paul said cryptocurrency is in a bear market “until new buyers are enticed”.
The addition of two new Wall Street whales should help get the ball rolling for institutional investors to start putting money in, but the big flow won’t happen until the regulatory situation is further clarified, and investment vehicles are approved, Paul said.
In the meantime, the current sell-off is not expected to last beyond tax time, and then we could see the Wall Street whale effect deepen enough to at least stop the bleeding.
By Jan Bauer for Safehaven.com
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