Who are the richest institutional cryptocurrency investors?
Among the meteoric growth of the first decade of the cryptocurrency market, many people have grown considerable wealth. The ‘bitcoin billionaire’ is a term that can describe many of the early adopters of the original blockchain-based digital currency.
Clearly these pioneers had either a stake in creating some of these technologies, or were extremely forward-thinking. There was a huge amount of skepticism in the early days of bitcoin, and a ton of risk in sinking any sizable investment. The payoff has been huge for some, and now we’re seeing some people who have built their fortune in other industries getting involved in the crypto trading market.
What’s interesting to note about this is that these wealthy and influential people and firms are much more cautious in their investments. They have made fortunes, and typically engage in lower-risk ventures. Something is drawing them to cryptocurrency, and if they are getting involved, it should make us all think about getting involved too.
If you are already an investor, it’s likely that you already follow cryptocurrency news to stay informed on the best cryptocurrency to invest in. Paying attention to these high-profile investors and mirroring their investments can be a solid strategy.
In 2017, the Wealth Report by Knight Frank revealed that 21% of wealth advisers and private bankers reported their clients’ increasing investments in cryptocurrency. All indications are that will increase again for 2018. Let’s take a look at some who have advanced their positions.
Goldman Sachs Group
As financial institutions go, Goldman Sachs is one of the world’s largest. Founded in 1869 by Marcus Goldman and Samuel Sachs, the firm was the most important player in the newly formed IPO market of the early 20th century. Constantly reinventing itself, the firm is now one of the most technologically advanced, so it’s no surprise they are pushing their exploration of blockchain and cryptocurrency.
Earlier this year, they announced the acquisition of a major cryptocurrency exchange, Poloniex. In May, the firm announced that it would trade bitcoin futures contracts on behalf of customers. Also in May, it was discovered that the company is developing a “US dollar” stablecoin, backed by fiat currency. Parent company ‘Circle Internet Financial’ also launched Circle Invest, to facilitate the emergence of new players in the blockchain/digital currency market.
Well known for his philanthropic and activist work, Soros has built a prodigious hedge fund called Soros Fund Management. Established in 1969, the fund currently manages a portfolio of around $26 billion. In the past, Soros has been a vocal critic of cryptocurrency, in particular, bitcoin.
Even as early as this past January at the Davos Economic Summit, Soros was skeptical of the new technology, calling it too volatile to be considered currency. However, on April 6, the firm announced that they would begin trading in cryptocurrency.
The powerful CEO of one of the world’s biggest financial institutions, JP Morgan Chase, Jamie Dimon has also been a vocal critic of bitcoin in the past. After making some disparaging remarks about the cryptocurrency, including calling it “not a real thing, it will eventually be closed,” last year, he quickly reversed course this past January.
“I regret making that comment”, he said. “The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually.” The turnaround also came in the form of heavy investment by the company in blockchain technology, developing their own internal system called Quorum.
The firm has also hired Oliver Harris, a London-based fintech expert, to develop their cryptocurrency strategy. He is responsible for further developing their internal blockchain as well as the creation of new cryptocurrency projects internally.
Another of the world’s wealthiest and most influential families, the Rockefellers were the driving force behind what is now the Venrock Venture Company. Started by a great grandson of John Rockefeller named Laurance, the firm was developed to invest in high tech and IT industries. Early investments included Intel and Apple, but lately the firm has been exploring the cryptocurrency market.
In April, the company revealed that it had entered into a partnership with CoinFund to support blockchain startups. “We wanted to partner with this team”, said David Pakman, a partner at Venrock. He went on to state that Venrock is interested in long-term investment in both blockchain technology and the cryptocurrency industry.
Many influential venture capital firms all around the world are getting involved in crypto and blockchain investment. One of the industry giants, SoftBank’s ‘Vision Fund’ has been aggressively investing in blockchain and cryptocurrency. It’s a signal of a larger shift of institutional investors to the bleeding-edge technologies.
“I think institutional investors are slowly coming to the realization that blockchain will be Internet or Web 3.0 and they’ll want to participate just like they want to participate in the Web,” said Mike Novogratz, former hedge fund manager and investment expert in a recent interview.
Institutional investors shape the demand
This wave of institutional investors can both stabilize and simultaneously disrupt the cryptocurrency market. One of the key hallmarks of the technology is the decentralized nature, while these big firms might all look to exert some central authority and their involvement may invite increased regulation.
It remains to be seen what effect that will have on the industry, but the validation of blockchain technology by the involvement of such powerful institutions means that choosing the best cryptocurrency to buy now has to be based around which ones will thrive in this new landscape.
Either way, the shift away from criticism of cryptocurrency to massive investment by these powerhouse financial firms signals a bright future for the technology.