Soros Fund Interested in Crypto Infrastructure Says CIO

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In Brief
  • Soros CIO Dawn Fitzpatrick said the hedge fund finds the infrastructure around crypto "really interesting."

  • She says crypto is at an "inflection point" because of increased inflation in the past year.

  • Fitzpatrick also discusses how China’s trials with a CBDC could affect bitcoin.

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Soros Fund Management CIO Dawn Fitzpatrick said the investment fund manager finds the infrastructure around crypto to be “really interesting.”



“We’ve been making some investments into that infrastructure,” she told Erik Schatzker on Bloomberg’s Front Row. “I’d say it’s everything from exchange asset managers, custodians to the mundane, like tax reporting on your crypto gains, and everything in between. We think that’s interesting.”

Crypto at an Inflection Point

Fitzpatrick also highlighted that crypto was at an “inflection point,” in terms of growing interest and adoption. “Something like bitcoin might have stayed a fringe asset but for the fact that over the last 12 months we’ve increased money supply in the US by 25%,” Fitzpatrick said. “So there’s a real fear of debasing fiat currencies.” 



Regarding bitcoin itself, Fitzpatrick said she considered a commodity rather than a currency. Albeit, a commodity with many appealing features for investors. “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,” she said. 

These aspects have made bitcoin an attractive alternative to gold. Fitzpatrick remarked recently gold had struggled more than in past inflationary periods. “I think that’s because bitcoin is taking some of its buyer base away,” she explained.

CBDCs as a Threat to Bitcoin

Fitzpatrick then segued to how cryptocurrencies will be affected by central bank digital currencies (CBDC). “Central bank digital currencies are going to be here quicker than people expect,” Fitzpatrick said. 

The Soros CIO mentioned China’s trials with its own CBDC, which it began last year. Fitzpatrick said there were strategic reasons why China is striving to be first out of the gate with CBDCs. “They want that digital currency to be used around the world,” she emphasized.

While she admitted this could pose a threat to bitcoin and other cryptocurrencies, she said this would only be temporary. “I don’t think they will be successful in permanently destabilizing bitcoin,” she concluded.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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