Hedge fund billionaire George Soros has made a sizeable investment in digital assets. His investment investment arm, Soros Fund Management, appears to have increased its exposure to the cryptocurrency industry. Per a 13F filing with the U.S. Securities and Exchange Commission, he has made recent investments in Marathon Digital, MicroStrategy, and Silvergate Bank.
This Hedge Fund Actor Plays a Big Role
The fund purchased $39.6 million worth of convertible debentures of Marathon Digital Holdings, a crypto mining company. These debentures are long-term debt instruments that can be converted into stock after a specified period of time.
Soros Fund Management also increased its holdings in MicroStrategy. it now owns both call and put options on 50,000 shares, as well as nearly $200 million in MicroStrategy preferred shares. The company Soros is injecting funds into is considered a proxy for holding bitcoin due to the company’s large cryptocurrency holdings.
The firm’s investment strategy with MicroStrategy may be a hedging strategy on the company’s shares. This would be accomplished through an option play, according to a trader interviewed by CoinDesk. The firm may be betting on a decline in MicroStrategy’s shares through its put options. At the same time, Soros would benefit from any potential rise in the company’s shares through its call options.
Soros’ investment firm is supporting this investment with transparency. It has disclosed that it holds 100,000 shares of put options with a financial organization that has stirred up activity recently.
This entity, Silvergate Bank , is a crypto-focused bank that has recently seen its stock price decline due to regulatory concerns. It is unclear if the fund still holds this position as the filing was as of the end of 2022.
The move by Soros Fund Management to increase its exposure to the cryptocurrency industry through these investments is notable as Soros has been a long-time critic of cryptocurrencies. However, the firm’s specific investment strategy and rationale for these positions is not clear from the filing.
As cryptocurrency continues to gain mainstream acceptance and investment from major institutional players, it will be interesting to see how Soros Fund Management’s investment strategy in this sector evolves in the future.